Fang stocks draw blood on Wall Street

By City A.M.

WALL Street stocks stumbled yesterday as Fang stocks fell and US Treasury yields continued their ascent to multi-year highs on the latest round of strong economic data, building concerns for an acceleration of inflation.

The Dow suffered its first decline in six sessions, while both the S&P and Nasdaq had their worst day since 25 June.

The yield on the benchmark 10-year Treasury note climbed to a seven-year high of 3.232 percent, marking its largest daily jump since the 2016 US presidential election.

Data on jobless claims and factory orders were the latest in a round of strong economic reports this week, putting the focus squarely on Friday’s payrolls report for September.

“The follow-through on the Treasury rates today, actually the follow-through worldwide on Treasuries, has a big part to do with this,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago.

Financials were one of the few bright spots on Wall Street, rising 0.71 per cent. Banks, which typically benefit from rising rates, gained 0.81 per cent.

Yesterday’s data, which showed jobless claims fell to a near 49-year low, followed comments this week from several Federal Reserve officials, including chairman Jerome Powell, that underscored the strength of the economy.

The Dow Jones Industrial Average fell 200.91 points, or 0.75 per cent, to 26,627.48, the S&P 500 lost 23.9 points, or 0.82 per cent, to 2,901.61 and the Nasdaq Composite dropped 145.58 points, or 1.81 percent, to 7,879.51.

Equities have struggled over the past year when interest rates climbed faster than investors were anticipating.

Among the biggest drags on the S&P were the so-called Fang group of tech stocks.

Google parent Alphabet sank 2.8 per cent and Netflix slumped 3.6 per cent. Apple lost 1.76 per cent.

This article provided by NewsEdge.