US stocks fall as bond yields push higher

A trader works on the floor of the New York Stock Exchange, on April 14, 2022. PHOTO: REUTERS

NEW YORK (AFP) - Wall Street stocks concluded a holiday-shortened week on Thursday (April 14) on a weak note, with tech shares diving amid worries over higher interest rates.

The yield on the 10-year US Treasury note surged above 2.8 per cent, resuming an upward climb after Wednesday's pullback helped boost stocks. Treasury yields are seen as a proxy for interest rates.

"Right now, we're tied to this correlation between rising yields and falling tech shares," said Art Hogan, strategist at National Securities.

Tech shares typically react more negatively to higher interest rates because they rely more on debt compared with companies in other sectors.

Concerns about higher yields due to tightening Federal Reserve policy overshadowed a report showing weaker-than-expected retail sales growth in March and mixed earnings from large banks.

The broad-based S&P 500 finished at 4,392.59, down 1.2 per cent for the session and 2.1 percent for the week.

The Dow Jones Industrial Average dipped 0.3 per cent to 34,451.23, while the tech-rich Nasdaq Composite Index slumped 2.1 per cent to 13,351.08.

Among individual companies, Twitter fell 1.5 per cent as Tesla chief executive Elon Musk, who owns 9.2 per cent of the social media company, launched a hostile US$43 billion takeover bid for the company.

The move follows Musk's criticism of the platform. Some analysts expressed scepticism about the bid, noting Musk's history of outrageous and unpredictable conduct.

Large banks were mixed following a deluge of earnings, with executives describing the US economy as in solid condition, but warning of uncertainty over the Ukraine invasion, inflation and shifting monetary policy.

Citigroup gained 1.6 per cent, while Goldman Sachs dipped 0.1 per cent and Wells Fargo tumbled 4.5 per cent.

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