Dow falls more than 100 points after 10-year Treasury yield crosses 5% for the first time since 2007: Live updates
The yield on the benchmark 10-year Treasury crossed 5% for the first time in 16 years on Thursday
Stocks retreated Friday as a surge in the 10-year Treasury yield
prompted broader concerns about the state of the economy.
The S&P 500
shed 0.8% and was on pace for its first losing week in three, while the Nasdaq Composite
dropped 1.2%. The Dow Jones Industrial Average
126 points, or 0.4%, dragged down by American Express
following a mixed earnings report.
The yield on the benchmark 10-year Treasury crossed 5% for the first time in 16 years on Thursday, a level that could ripple through the economy by raising rates on mortgages, credit cards, auto loans and more. Not to mention, it offers investors an attractive alternative to stocks.
The 10-year yield hit 5.001% around 5 p.m. ET Thursday, the first time it has traded above that level since July 2007. It was last trading at 4.912%.
“The stock market is watching the bond market and doesn’t like what it sees,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “Yields are rising, even with the relatively good news about inflation. This is the primary reason the stock market has been weak.”
The 30-year U.S. Treasury
yield also hit a high last seen in July 2007. Meanwhile, the 30-year fixed mortgage rate reached 8% this week, a level not seen since 2000.
Regional banks tumbled as higher rates raised worries about the sector’s exposure to Treasury securities that are falling in value. Regions Financial
led the decline after a weak earnings report, falling more than 10%. The SPDR S&P Regional Banking ETF (KRE)
lost nearly 3%.
American Express
shares dipped 4%. The company’s earnings per share beat expectations, but revenue was about in line with estimates. Non-interest revenue, meanwhile, missed a StreetAccount consensus forecast.
Solar stocks were also among the biggest decliners. The move came after SolarEdge
slashed its third-quarter revenue guidance, sending the stock down 30%.
Concerns over higher rates weighed on the market during the week. The S&P 500 is down 1.9% on the week, while the Dow has lost 1.1%. The Nasdaq is off 2.7%, putting it on pace for its second straight week of losses.
Nvidia, he closely followed artificial intelligence stock, was on pace for its worst week since September 2022 with a loss of nearly 9%. The stock slid more than 1.5% in Friday’s session.
Tesla
was on track to end the week 15% lower, which would be its worst week since December 2022. The electric vehicle maker, which reported earnings on Wednesday, missed Wall Street expectations on both lines for the first time since 2019.
11 MIN AGO
Fed’s Mester says interest rates are near their peak
Cleveland Federal Reserve President Loretta Mester said Friday she expects that interest rates likely won’t be raised much more from here, if at all.
“Regardless of the decision made at our next meeting, if the economy evolves as anticipated, in my view, we are likely near or at a holding point on the funds rate as we accumulate more information on economic and financial developments and assess the effects of the tightening in financial conditions that has already occurred,” Mester said in remarks delivered for a speech in New York.
The central bank official added that she agrees with Federal Open Market Committee estimate in September that another rate hike could come before the end of 2023, but noted that handicapping such moves is difficult now.
Mester is not a voting member of the FOMC this year but will vote in 2024.
—Jeff Cox
37 MIN AGO
Enphase Energy, electric vehicle stocks among the week’s biggest Nasdaq losers
The Nasdaq Composite
and concentrated Nasdaq-100
fell about 1% on Friday, putting the indices on pace to fall more than 2% for the week.
Enphase Energy
is the biggest laggard on the tech-heavy index, tumbling more than 19% since the start of the week. Moderna
’s slumped more than 17%, while Lucid Group
and Tesla
are slated to drop more than 14% each for the week. Tesla fell 9% on Thursday after the electric vehicle stock reported disappointing results and shares cautious commentary.
Nvidia
is another notable laggard. The chipmaker’s on pace to finish the week 8% lower after selling off on the back of new AI chip export curbs to China. Lam Research a
nd Marvell Technology
are down more than 5% each since the start of the week. Meanwhile, China-based e-commerce company JD.com
is headed for a nearly 10% weekly loss.
Some stocks have managed to buck the technology sector’s broader weekly downtrend. That included Dexcom
and Netflix
, up more than 13% each since the start of the week. Netflix reported strong quarterly results after the bell Wednesday and posted strong subscriber numbers.
— Samantha Subin
1 HOUR AGO
UBS upgrades Merck due to ‘underappreciated pipeline readouts’
Investors aren’t considering the full value of Merck
’s “underappreciated pipeline readouts,” according to UBS.
The bank upgraded Merck stock to a buy rating on Friday. Shares of the stock have slid more than 9% since the start of the year.
“With the current macro environment uncertain, we believe Pharma stocks with high near-term growth and relatively lower downside risk should outperform lower-growth peers,” wrote analyst Trung Huynh. “Merck encompasses these attributes with solid growth (2022-27E EPS 4.8% vs. peers’ 2.6%), driven by Keytruda and Gardasil entering a consistent growth phase and largely unaffected by IRA Medicare price negotiation until 2028.”
CNBC Pro subscribers can read the full story here.
— Lisa Kailai Han
.
he Art of Liberty Foundation will be co-sponsoring a conference in Sedona, Arizona on November 3rd, 4th and 5th entitled: Liberty on the Rocks!
The conference brings together some of the leading lights in Liberty to discuss our current political situation and SOLUTIONS, including how to create local Liberty groups and Freedom Cells and how to move yourself out of organized crime’s crooked admiralty law system by correcting your status and standing. Friday night, there will be a VIP Dinner and concert Featuring Grant Prezence. Saturday we are at the Global Center for Christ Consciousness in Sedona for talks, workshops and a panel. There will be a Liberty expo with the ability to table. It is free for all on Saturday after 3:00 PM. Sunday we are taking folks for yoga and hiking in the most beautiful place on the planet. Get the details at
https://Sedona.ArtOfLiberty.org