Rebound In Treasury Yields Overshadow Stock Trading On Wall Street

Barry Adams
22 Oct, 2024
New York City

Stocks on Wall Street declined for the second day in a row as bond yields rebounded to a three-month high. 

The S&P 500 index and the Nasdaq Composite decreased 0.4%, and both indexes extended two-day losses to close to 1%. 

The yield on 10-year Treasury notes edged closer to 4.20% as investors reassessed their interest rate outlook following a stream of positive economic data over the last five weeks. 

The S&P 500 index rallied in the previous six consecutive weeks after several economic data confirmed resilience of the U.S. economy and moderating but still expanding labor markets.

Moreover, the steady decline in inflation also supported the market enthusiasm for the Fed's plan to lower interest rates while avoiding a recession. 

U.S. GDP growth, factory orders, retail sales, and nonfarm payroll data support the view that the U.S. economy is still growing above its long-term average of 2% despite elevated interest rates. 

The latest economic data also support the case for policymakers to lower rates at a gradual pace, and the Federal Reserve is less likely to repeat the rate cut of 50 basis points announced on September 18 at the next policy meeting on November 7. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index decreased 0.4% to 5,829.67, the Nasdaq Composite fell 0.4% to 18,474.71, and the Russell 2000 index declined 0.3% to 2,233.39. 

For the year so far as of Monday, the S&P 500 index is up 22%, the Nasdaq Composite has advanced 26%, and the Russell 2000 index has gained 10.9%. 

The yield on 2-year Treasury notes edged higher to 4.02%, 10-year Treasury notes inched up to 4.17%, and 30-year Treasury bonds inched higher to 4.47%.

WTI crude oil increased $0.58 to $70.62 a barrel, and natural gas prices edged down 2 cents to $2.28 a thermal unit.

Gold rose by $17.81 to $2,739.12 an ounce, and silver increased by $0.44 to $34.44.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 103.96.

 

U.S. Stock Movers

3M Company declined 1.4% to $132.94 after the diversified industrial company reported its quarterly results. 

Revenue in the third quarter increased 0.4% to $6.3 billion, net income attributable to shareholders swung to a profit of $1.4 billion from a loss of $2.1 billion, and diluted earnings per share were $2.49 billion compared to a loss of $3.74 a year ago. 

The company revised its adjusted sales growth outlook to an increase of 1% from the previous estimate between a decline of 0.25% and an increase of 1.75%. 

The company also estimated adjusted annual earnings per share to range between $7.20 and $7.30 from the previous estimate between $7.0 and $7.30. 

Cheesecake Factory increased 0.1% to $42.49 after an activist investor, JCP Investment Management, acquired a stake in the restaurant company and urged the company to spin off its three brands into a separate company. 

Sherwin Williams declined 3.5% to $368.38 after the paint company reported weaker-than-expected third quarter results. 

Consolidated net sales increased 0.7% to $6.16 billion, net income increased to $806.2 million from $761.5 million, and diluted earnings per share advanced to $3.18 from $2.95 a year ago. 

The company reaffirmed its full-year diluted earnings per share range between $10.30 and $10.60, including acquisition-related amortization expense of 80 cents per share.