Interest worries rattle market

first_imgNEW YORK – A surge in Treasury yields rattled Wall Street on Wednesday, forcing stocks to give up early gains and drive down the Dow Jones industrial average more than 140 points. The 10-year Treasury note’s yield soared to 5.14 percent late Wednesday from 5.09 percent late Tuesday, reigniting worries among stock investors that high rates could thwart corporate deal-making and further injure the limping housing market. The stock market started reacting violently to Treasury yields two weeks ago when the 10-year yield surged past 5 percent for the first time since last summer. Wall Street had traded more mildly in recent days as yields retreated from last week’s peak of nearly 5.30 percent, but Wednesday’s yield advance stoked fears that they could resume their climb. “People are watching this 10-year, and it looks like it might want to go back to 5.25,” said Todd Leone, managing director of equity trading at Cowen & Co. Until last week, the 10-year Treasury yield had not traded consistently above 5.25 percent since 2002. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! Furthermore, Leone said, the private equity deal-making wave, which was a main driver for the market for several weeks, seems to have slowed down a bit compared with last month. “The guys are doing a little more homework, and there aren’t as many companies to grab up.” Home Depot’s $22.5 billion buyback Wednesday initially lent some support to the market, as did stronger-than-expected quarterly earnings from Morgan Stanley and a retreat in oil prices. But the market eventually caved, after investors decided that the positive news wasn’t enough to warrant a return to record territory. The Dow fell 146.00, or 1.07 percent, to 13,489.42, after bobbing in and out of positive and negative territory earlier in the day. Broader stock indicators also tumbled. The Standard & Poor’s 500 index declined 20.86, or 1.36 percent, to 1,512.84, and the Nasdaq composite index fell 26.80, or 1.02 percent, to 2,599.96. Home Depot, one of the 30 Dow components, rose $1.76, or 4.6 percent, to $40.03 after announcing it will buy back more than a quarter of its shares and sell its Home Depot Supply business to a group of private equity firms for $10.3 billion.last_img

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