U.S. Stocks Decline on Tech Woes, Treasuries Slide: Markets Wrap

(Bloomberg) -- U.S. stocks fell for the first time in four days as technology shares came under pressure from trade and earnings concerns. Treasuries hit the lowest since February amid a wave of selling across European sovereign debt and inflation.

The S&P 500 Index dropped the most in nearly two weeks as tech shares slumped after Taiwan Semiconductor’s disappointing forecast roiled chipmaker stocks. China’s request for concessions from Qualcomm Inc. to acquire NXP Semiconductors NV ratcheted up tensions over trade. Earnings misses from Procter & Gamble Co. and Philip Morris International Inc. weighed on consumer staples.

Stocks pared part of the loss in late trading after Deputy Attorney General Rod Rosenstein was said to tell President Donald Trump last week he isn’t a target of Special Counsel Robert Mueller’s investigation.

Meanwhile, commodities prices remained high in the aftermath of U.S. sanctions on Russia and heightened tariff concerns. While torrid gains in metals from aluminum to nickel and oil faltered Thursday, the rallies have spurred speculation inflation will pick up. That helped to push 10-year Treasury yields above 2.9 percent for the first time since February.

Rate-sensitive shares responded, with financial firms rallying the most in the S&P 500. Blowout earnings from American Express helped. Bond proxies like real-estate firms retreated. The dollar gained the most in three weeks.

“If crude starts to take off and with it wages go higher, prices for housing go higher, etcetera, etcetera, you get your inflation pretty quickly from that,” Joe “JJ” Kinahan, the chief market strategist at TD Ameritrade, said by phone. “This is the second day this week we’ve seen bonds get hit pretty good, so now it has everybody nervous for the economy if rates do go higher, what does it mean for the overall economy outside financials?”

Elsewhere, the Swiss franc weakened past 1.20 per euro for the first time since the country’s central bank shocked markets in January 2015 with its decision to remove the cap on the currency.

Terminal users can read more in our markets live blog.

Here are the main moves in markets:

Stocks

• The S&P 500 Index fell 0.6 percent to 2,693.13 as of 4 p.m. New York time, the most since April 6. Losses halted near the 50-day moving average, which the index crossed for the first time in a month Monday.
• The Nasdaq Composite Index dropped 0.8 percent.
• The Stoxx Europe 600 Index was little changed.
• The MSCI All-Country World Index dropped 0.5 percent.

Currencies

• The Bloomberg Dollar Spot Index rose 0.5 percent, biggest rise in three weeks.
• The euro fell 0.2 percent to $1.2351.
• The British pound declined 0.8 percent to $1.4090.
• The Japanese yen dropped 0.1 percent to 107.32 per dollar.

Bonds

• The yield on 10-year Treasuries increased four basis points to 2.91 percent, the highest in eight weeks.
• Germany’s 10-year yield climbed seven basis points to 0.60 percent, the biggest gain since Jan. 10.
• Britain’s 10-year yield rose 11 basis points to 1.520 percent, the highest in four weeks.

Commodities

• West Texas Intermediate crude fell 0.4 percent to $68.18 a barrel.
• Gold slid 0.2 percent to $1,346.41 an ounce.
• LME nickel dropped 1.3 percent to $15,075 per metric ton.
• LME aluminum declined 2.1 percent to $2,485.00 per metric ton.

--With assistance from Samuel Potter

To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net, Sarah Ponczek in New York at sponczek2@bloomberg.net.

To contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.net.

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