Finance
Stock market whacked as 10-year hits highest level in over 7 years
- US equity markets were under pressure Thursday as the 10-year
yield touched its highest level since the spring of 2011. - Selling weighed heaviest on the tech-heavy Nasdaq,
which saw losses in excess of 2%. - Super Micro Computers crashed more than 50% after it was
reported that Chinese spies implanted tiny chips in
server motherboards that were purchased from the company. - Watch
the Nasdaq trade in real time here.
US equity markets were under pressure Thursday as Treasury yields
touched their highest levels in over seven years. Selling weighed
heaviest on the tech-heavy Nasdaq, which saw losses in excess of
2%. The Dow Jones industrial average and the S&P 500 were
both lower by more than 1.2%.
Tuesday’s weakness comes as the benchmark
10-year Treasury yield raced above 2.30% for the first time
since the spring of 2011. The 10-year had rallied more than 15
basis points since Tuesday’s close after a strong
private-sector payrolls reading fueled speculation that the
Federal Reserve would hike interest rates more quickly than
expected. Those rate hikes would make it more expensive for
companies to borrow money, and potentially choke off economic
growth sooner than anticipated.
Heavy selling battered the technology sector, where
Super Micro Computer crashed more than 50% after it was
reported that Chinese spies implanted tiny chips in
server motherboards that were purchased from the company by firms
including Amazon and Apple. Their stocks fell more than
1%.
Elsewhere in the space,
Snap plunged below $8 a share for the first time after
Evercore analyst Anthony DiClemente warned that Instagram is
“irreversibly reducing” the company’s ability to meet investors’
long-term expectations.
Netflix and Tesla lost 4% and 5% respectively.
Meanwhile, there was some positive news on the earnings front.
Constellation Brands, the beverage maker behind Corona beer and
Svedka vodka, said
its booming beer business helped fuel its strong results. The
company also noted that it had
made more than $1 billion on its investment in the Canadian
cannabis producer Canopy Growth.
Thursday’s sharp sell-off means there will be more at stake
Friday morning, when the Bureau of Labor Statistics releases its
September jobs report. Analysts surveyed by Bloomberg are
anticipating the US economy added 185,000 nonfarm jobs as the
unemployment rate slipped to 3.8%.
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