Rise in interest rates spark panic on Wall Street

29 April, 2018, 13:24 | Author: Regina Lloyd
  • Dow Jones falls nearly 425 points; Caterpillar reports earnings plateau

(BA), but the broader market finished (http://www.marketwatch.com/story/stock-selloff-set-to-continue-as-10-year-yield-blows-further-past-3-2018-04-25) the session little changed, as investors wrestled with climbing government bond yields.

BONDS: Investors may have also been anxious about rising interest rates, as they tend to slow down economic growth by making it more expensive for people and companies to borrow money.

The rise in Treasury yields reflected the durability of the USA economic expansion and stoked views the three-decade-old bull market in bonds is coming to an end.

Other industrial, technology and basic materials companies also took sharp losses. 3M said raw materials costs are rising, especially for materials derived from crude oil, whose price has been rising, and transportation and logistics expenses are rising as well. The blue-chip index Dow Jones Industrial Average fell by 423 points (-1.7%) to 24,024.13 points, wiping out an increase of 131 points from the beginning of the session.

On Wednesday, the USA stocks fell drastically adding up to the losses of the last session, as the investors fretted over interest rates reaching multiyear highs. The Nasdaq composite declined 68 points, or 1 percent, to 6,939.

Low interest rates have played an important role in the economic recovery of the last decade, and the yield on the 10-year note is a benchmark for many kinds of interest rates including mortgages.

Comcast rose 2.7 percent after the largest US cable company confirmed its $31 billion bid for Sky on the heels of its better-than-expected earnings report.




ENERGY: Benchmark U.S. crude oil shed 1.4 percent to $67.70 a barrel in NY. The stock market had already been spooked by a climb in bond yields earlier in the year, sliding sharply in February.

The aerospace company topped Wall Street's estimates in the first quarter and raised its forecasts for the year.

The Russell 2000 is down 10.84 points, or 0.7 percent.

Other big technology companies also fell, as Facebook dropped 3.7 percent to $159.69 and Microsoft skidded 2.3 percent to $93.12.

Another market favorite, Amazon, shed 3.6 percent to $1,462.70. Comcast rose 1.6 percent to $33.85 and Fox gained 1.1 percent to $36.42.

The Dow rose 59 points, or 0.4 percent, to 24,083.

Wholesale gasoline lost 1.4 percent to $2.09 a gallon. The Brent oil price fell by 0.96% to 73.99 United States dollars per barrel. The maker of Maytag and KitchenAid products rose 4.4 percent to $156.93. By the close, Hong Kong's Hang Seng lost 1%, South Korea's Kospi fell 0.6%, China's Shanghai Composite shed 0.4%, and Japan's Nikkei dipped 0.3%.

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