US stock market: Wall Street closes near flat as Treasury yields surge
The benchmark U.S. 10-year Treasury yield rose as high as 4.198% during the session, the highest since November, extending its climb from a day earlier following Fitch's downgrade of the top-tier U.S. credit rating.
In late afternoon trade, the 10-year yield had dipped below 4.194. «It's really relative to just pricing against bond yields», said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis.
«Higher yield on 10-year treasuries,… has challenged the attractiveness of stocks.» A Labor Department report showed the number of Americans filing new claims for unemployment benefits increased slightly last week, while layoffs dropped to an 11-month low in July as labor market conditions remain tight. Investors were waiting for July's jobs report, due on Friday. Another report showed the U.S.
services sector slowed in July, but businesses faced higher prices for inputs as demand continued to hold up. Richmond Federal Reserve President Thomas Barkin said U.S. inflation remained too high, although recent readings indicated price pressures easing.
The Dow Jones Industrial Average fell 66.63 points, or 0.19%, to 35,215.89, the S&P 500 lost 11.5 points, or 0.25%, to 4,501.89 and the Nasdaq Composite added 11.77 points, or 0.08%, to 13,985.21. Eight of the eleven main S&P 500 sectors declined, with more interest rates sensitive Utilities and Real Estate leading losses, dropping 2.3% and 1.4% respectively. After the closing bell, Amazon.com shares surged when the online retailer forecast third-quarter revenue above Wall Street expectations, boosted by its Prime Day sale event in July that drew price-conscious consumers to its platform.
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