New York, Stocks were mostly lower in afternoon trading Thursday, as another tick up in bond yields once again pulled down shares of technology companies and the energy sector, AP reported.
The S&P 500 index was down 0.2% as of 12:06 p.m. Eastern. The Dow Jones Industrial Average rose 195 points, or 0.6%, to 33,211, helped by bank stocks. The technology-heavy Nasdaq Composite lost 1.5%.
Bank stocks were among the best performers as investors bet that higher interest rates would translate into higher profits. Industrial stocks also made solid gains.
The market touched new highs a day earlier after the Fed said U.S. economic growth should rebound to 6.5% this year “the strongest since the 1980s” and inflation will climb above 2% for the first time in years.
Bond yields ticked higher again, with the yield on the 10-year Treasury note rising to 1.73%, near levels not seen since January 2020.
Big technology stocks continued to be volatile and move mostly downward, as the tick up in bond yields has made expensive technology stocks less attractive. Apple shares fell 1.9%, Tesla was down 3.2%, and Microsoft fell 1.6%.
Investors have worried that if inflation picks up, central banks might respond by raising interest rates, which would cool economic growth. The U.S. economy still has a lot of recovering to do. The Labor Department said Thursday that the number of Americans who filed for unemployment benefits last week rose to 770,000, remaining well above historic norms for that metric.
Bank stocks, which tend to do well as interest rates rise and economies improve, were moving higher. Wells Fargo was up 3.9%, Bank of America was up 4.9% and JPMorgan Chase was up 3.9%.
Investors are betting the economic malaise will dissipate as spring arrives and more Americans get vaccinated against the coronavirus. The $1,400 stimulus checks the Biden administration began sending to individuals last weekend are helping. Fed policymakers foresee unemployment falling from 6.2% to 4.5% by year’s end and to 3.9% at the end of 2022.
Energy prices fell, with U.S. crude oil losing 3.6% to $62.25 a barrel in New York. That dragged energy companies lower as well. The energy sector of the S&P 500 was down 1.6%.
Source: Saudi Press Agency