US stocks mostly flat as investors buy up more 'attractive' bonds
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Traders work on the floor of the New York Stock Exchange, in New York City.
PHOTO: AFP
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NEW YORK - US stocks finished largely flat on Friday as investors snapped up more attractive government bonds with higher yields amid signs interest rates could remain higher for longer to tackle inflation.
The Dow Jones Industrial Average finished the trading day up 0.1 per cent at 34,500.66, while the broad-based S&P 500 was flat at 4,369.71.
The tech-rich Nasdaq Composite Index notched its fourth consecutive decline, slipping 0.2 per cent to 13,290.78.
The 10-year US Treasury note has been flirting with 15-year highs this week as investors digested the likelihood of the Fed keeping interest rates higher for longer to tackle above-target inflation.
As yields have risen, bonds like the US 10-year Treasury note have become more attractive to investors, who moved to snap them up during trading hours on Friday.
This had the impact of pushing the yield back down again, since bond prices move inversely to yields.
“There are a lot of investors looking at the yields and they are starting to get very attractive,” financial advisor Tom Cahill from Ventura Wealth Management told AFP.
“They are stepping in to do some buying of the bonds and of course that drives down yields – and that’s better for stocks,” he added.
Among individual stocks, Keysight Technologies fell almost 14 per cent after announcing disappointing earnings.
Beauty product company Estee Lauder also ended the day in the red after publishing lacklustre profits which it blamed on a poor post-Covid-19 recovery in Asian countries including China. AFP
