Thursday, March 04, 2021

Tech drags Nasdaq 100 to 3-week low

Feb 23. 2021
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By Syndication Washington Post, Bloomberg · Claire Ballentine

Tech stocks pulled back on valuation concerns while commodities rallied and bond yields rose with investors pricing in stronger growth and faster inflation as the global economy recovers.

The Nasdaq 100 slid almost 2% toward a three-week low as investors questioned the appeal of expensive, growth-focused stocks. The S&P 500 Index fell for a fifth day, its longest losing streak in a year. Gains for energy shares and financial companies limited losses on the Dow Jones industrial average. European and Asian markets were broadly negative.

Commodities were almost uniformly green. Brent oil climbed above $65 a barrel as Goldman Sachs Group Inc. predicted prices could advance into the $70s in coming months. Copper briefly rose above $9,000 a metric ton for the first time in nine years, taking another step closer to an all-time high set in 2011 as investors bet that supply tightness will increase as the world recovers from the pandemic.

After a tremendous run from the depths of the pandemic sell-off 11 months ago, stocks are under scrutiny as an increase an interest rates bolsters the appeal of fixed-income investments.

"Long-duration assets are the ones that are most vulnerable in a rising interest rate environment," said Scott Knapp, chief market strategist of CUNA Mutual Group. "The exact same stocks that led the market higher when interest rates were plummeting are the ones most vulnerable when interest rates rise."

Treasury yields climbed and a key part of the curve -- the gap between 5- and 30-year yields -- touched the highest level in more than five years. Yields rose in Asia, while European government yields reversed an advance and edged lower.

Elsewhere, Brazilian markets tumbled following President Jair Bolsonaro's decision to replace the head of Petroleo Brasileiro SA, the state-controlled oil company. The real fell 1% and the Ibovespa stock gauge dropped more than 4%.

Bitcoin slumped more than 10% at one point as prices pulled back from an all-time high.

These are some of the main moves in markets:

Stocks

The S&P 500 Index declined 0.8% as of 4 p.m. EST.

The Stoxx Europe 600 Index fell 0.4%.

The MSCI Asia Pacific Index dipped 0.8%.

The MSCI Emerging Market Index declined 2.2%.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%.

The euro climbed 0.3% to $1.2156.

The British pound increased 0.3% to $1.4062.

The Japanese yen gained 0.4% to 105.07 per dollar.

Bonds

The yield on 10-year Treasurys rose three basis points to 1.36%.

Germany's 10-year yield fell three basis points to -0.34%.

Britain's 10-year yield fell two basis points to 0.68%.

Commodities

West Texas Intermediate crude gained 3.8% to $61.49 a barrel.

Gold strengthened 1.4% to $1,809.63 an ounce.

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