By Chuck Mikolajczak
NEW YORK (Reuters) – Wall Street stocks dropped on Thursday as U.S. Treasury yields continued their ascent to multi-year highs on another round of strong economic data, increasing concerns for accelerating inflation.
The Dow was poised for its first decline in six sessions, while both the S&P and Nasdaq were on pace for their worst day since late June.
The yield on the benchmark 10-year Treasury note
“Over the last five years if I gave you the number a month, a week, a day in advance, you probably still couldn’t make money off of it because we knew what policy would be,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
“What is interesting here is now you are seeing rates start to move; the more rates move the more important that number becomes.”
Financials <.SPSY>, up 0.65 percent, were one of the few bright spots on Wall Street. More specifically, the banks <.SPXBK> gained 0.78 percent as they typically benefit from rising rates.
The data follows comments this week from several Federal Reserve officials, including Chairman Jerome Powell, that underscored the strength of the economy.
Shortly after 3 p.m. ET, the Dow Jones Industrial Average <.DJI> fell 212.47 points, or 0.79 percent, to 26,615.92, the S&P 500 <.SPX> lost 30.28 points, or 1.04 percent, to 2,895.23 and the Nasdaq Composite <.IXIC> dropped 155.51 points, or 1.94 percent, to 7,869.58.
Heavyweight names Apple
Market participants will be looking closely for signs of wage growth in Friday’s jobs number, especially in light of anecdotal indications of rising wages such as Amazon.com
Despite the pullback, U.S. stocks remain near record levels, raising some concern about valuations with the next earnings season just around the corner.
Among gainers, Constellation Brands
Declining issues outnumbered advancing ones on the NYSE by a 4.18-to-1 ratio; on Nasdaq, a 3.19-to-1 ratio favored decliners.
The S&P 500 posted 8 new 52-week highs and 18 new lows; the Nasdaq Composite recorded 21 new highs and 90 new lows.
(Reporting by Chuck Mikolajczak; Editing by Dan Grebler)