Rise in interest rates spark panic on Wall Street

A street scene in Tokyo earlier this year

Wall Street dropped sharply on Tuesday as warnings by bellwether companies of higher costs reverberated as the benchmark U.S. 10-year Treasury yield pierced the 3$ level for the first time in four years.

The Dow Jones industrial average finished with a loss of 424.56 points, or 1.7 percent, to 24,024.13.

The S&P 500 index added 4.84 points, or 0.2 percent, to 2,639.40.

The fall in the Nasdaq composite index was 1.7% to 7007.35 points, with shares of Facebook, Amazon, Alphabet and Netflix falling by more than 3.5%.

Later in the day Caterpillar stock fell 6.2 percent after Chief Financial Officer Bradley Halverson said the company's first quarter would be "the high-water mark for the year" during a conference call.

Wall Street limped into positive territory on Wednesday on optimism over a spate of upbeat earnings that was almost offset by jitters over rising USA bond yields and corporate costs. Twitter posted a better-than-expected profit and revenue for the first quarter. The yield on the 10-year Treasury note rose to 2.99 percent from 2.98 percent. Industrials fell 0.6 per cent as shares of railroad companies lost ground.

"It's not a mystery why these things are happening", Baumohl said. Stock indexes in Europe and Asia are also taking losses.

The 10 year benchmark of Treasury yield traded at 3.02 percent after breaking above the rate of 3 percent for the first time on Tuesday since 2014. the rates which are moving higher is pushing the stocks lower with the Dow dropping by more than 400 points. The company reported better-than-expected first-quarter earnings and boosted its full-year sales and profit forecast but did not raise its 2018 cash-flow projections.

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.

Gold fell 0.7 percent to $1,324.10 an ounce and silver sank 0.8 percent to $16.57 an ounce.

"Fears of "peak earnings" are laughable considering that the average constituent in the S&P 500 has enjoyed year-over-year bottom line growth in excess of 20%", Klein wrote in a note. YIELDS QUESTION: Bond prices slipped again Tuesday. The futures on the USA oil variety WTI dropped its price by 1.14% to 67.86 Dollars per barrel. Natural gas rose 1.5 percent to $2.78 per 1,000 cubic feet. Investors cheered the latest corporate earnings, sending the Dow up by 131 points at its session high.

Benchmarks in Hong Kong and South Korea fell as much as 1% by midday, while a number of other markets logged declines of at least 0.5%.



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