U.S. Stocks Edge Lower While Bonds Extend Losses: Markets Wrap
A businessman is reflected on an electronic board displaying a graph of a market induce outside a securities firm. (Photographer: Yuriko Nakao/Bloomberg)

U.S. Stocks Edge Lower While Bonds Extend Losses: Markets Wrap

U.S. stocks finished mostly lower as benchmark Treasury yields climbed to the highest levels in a year, renewing concern that rising borrowing costs and price pressures could derail the economic recovery.

The S&P 500 Index turned negative in the final minutes of trading Friday, ending lower for the first week in three. Utilities and consumer staples led the declines, while the materials and energy sectors finished in the green. The tech-heavy Nasdaq 100 was weighed down by Microsoft Corp. and Facebook Inc.

“The two big things right now are waiting for stimulus and this idea of the reflation trade -- investors have a keen eye out for signs of inflation,” said Shawn Snyder, head of investment strategy at Citi Personal Wealth Management. “You see Treasury yields moving higher, that’s causing a bit of consternation in the markets.”

Corporate earnings reports had given investors something to think about on Friday other than the relentless rise in Treasury yields, which dominated discussion this week and fueled concern about the staying power of the New Year stock rally. Applied Materials Inc. climbed after a strong forecast for the current quarter helped by growing orders from chipmakers rushing to produce more supply.

U.S. Stocks Edge Lower While Bonds Extend Losses: Markets Wrap

Recent economic data are a reminder of the fragility of the growth backdrop, with a report Friday showing U.K. retail sales fell more than twice as fast as expected in January.

Meanwhile, the Stoxx Europe 600 index advanced for the first time in four days, while the euro strengthened after Germany’s manufacturing PMI climbed more than forecast in February. The British pound rallied above $1.40 for the first time since 2018.

Oil traded below $60 a barrel as wells slowly restarted in Texas after being hit by a big freeze. The White House said it would be willing to meet with Iran, potentially paving the way for more crude exports from the Persian Gulf nation.

U.S. Stocks Edge Lower While Bonds Extend Losses: Markets Wrap

These are some of the main moves in markets:

Stocks

  • The S&P 500 Index dipped 0.2% to 3,906.71 as of 4:08 p.m. New York time, the lowest in two weeks.
  • The Dow Jones Industrial Average was little changed at 31,494.32.
  • The Nasdaq 100 Index declined 0.4% to 13,580.78, the lowest in more than two weeks.
  • The Stoxx Europe 600 Index advanced 0.5% to 414.88.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.2% to 1,124.92.
  • The euro increased 0.2% to $1.2115.
  • The Japanese yen strengthened 0.2% to 105.47 per dollar, the largest gain in more than a week.
  • The British pound gained 0.2% to $1.4004, the strongest in almost three years.

Bonds

  • The yield on 10-year Treasuries increased four basis points to 1.34%, the highest in about a year.
  • Germany’s 10-year yield climbed four basis points to -0.31%, the highest in more than eight months.
  • Britain’s 10-year yield increased eight basis points to 0.698%, the highest in 11 months on the largest climb in almost two months.
  • Commodities

  • West Texas Intermediate crude decreased 2.5% to $58.98 a barrel, the lowest in more than a week on the biggest dip in 15 weeks.
  • Gold strengthened 0.3% to $1,781.34 an ounce, the first advance in more than a week.

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