New York: US stocks retreated from the record closing levels to open lower Thursday as high interest rates drew investors out of the market despite strong US economic data.
The benchmark US Treasury 10-year bond ticked up to 3.19 percent, after reaching 3.22 percent on Wednesday.
About 20 minutes into the trading day, the Dow Jones Industrial Average was off 0.3 percent to 26,748.19.
The broad-based S&P 500 lost 0.4 percent to 2,913.70, while the tech-rich Nasdaq Composite Index dropped 0.9 percent to 7,957.39.
Patrick O’Hare of Briefing.com said the interest rate increase was “the primary catalyst for this morning’s negative disposition.”
He said “some burgeoning angst that interest rates are poised to enter a more restrictive domain for stocks has tempered some of the enthusiasm that recently carried the major indices to new record highs.”
Rising interest rates increase borrowing costs, and also make safe-haven investments more attractive compared to stocks.
Charles Schwab analysts said the “surge in Treasury yields appearing to cause some caution to flare-up, even as global trade concerns remain relatively subdued and economic data has been stronger than expected.”
Strong economic data pushed the Dow to a second straight record on Wednesday, but prices had begun to pull back by the end of the session.
There was little data on offer Thursday, but an unexpected drop in initial claims for unemployment insurance added to the report of strong private sector hiring bode well for the government employment report for September due for release Friday.
Bookseller Barnes & Noble surged 28 percent after announcing it was evaluating a possible sale.
Tech company HP was up more than three percent after the company’s earnings estimate for the year was better than analysts had expected.
Constellation Brands, known for its Corona beer, jumped five percent raised its profit forecast for the year.
[source_without_link]AFP[/source_without_link]