US stocks end mostly down as treasury yields spike

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NEW YORK (AFP) - Wall Street stocks finished mostly lower on Thursday (Feb 1) following another choppy session due to unease over the prospect of higher interest rates as treasury bond yields hit multi-year highs.

The yield on the 10-year US Treasury was at 2.789 per cent, its highest level since April 2014.

The Dow Jones Industrial Average ended up 0.1 per cent at 26,186.71.

The broad-based S&P 500 dipped 0.1 per cent to 2,821.98, while the tech-rich Nasdaq Composite Index fell 0.4 per cent to 7,385.86.

Wall Street stocks spent several hours in the middle of the session in positive territory as new funds rolled in at the start of new trading month before some investors took profits.

But Karl Haeling, vice-president of LBBW, said bond yields crossed new thresholds, with more market watchers fearful that higher interest rates will limit economic growth and encourage investors to steer money from stocks to bonds.

"Some people think we are ready for a correction and these people used the trade this morning as an opportunity to adjust their portfolios," said Haeling, adding that, "I don't think people are becoming bearish."

Facebook jumped 3.3 per cent after reporting a 20 per cent rise in fourth-quarter profits to US$4.3 billion (S$5.6 billion) as ad revenue and the ranks of users grew.

Microsoft lost 0.9 per cent after reporting a 12 per cent rise in quarterly revenues to US$28.9 billion thanks to gains in business services and cloud computing. But one-time charges connected to US tax reform and the repatriation of overseas profits led to a US$6.3 billion loss.

Other tech giants were due to report results after the closing bell Thursday. These included Apple, which rose 0.2 per cent during the session, Amazon, which dropped 4.2 per cent and Google parent Alphabet, which shed 0.2 per cent.

EBay surged 13.8 per cent after announcing plans to shift its payment business from PayPal Holdings to Adyen BV. PayPal slumped 8.1 per cent.

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