The Atlanta Journal-Constitution
U.S. stocks, Treasuries fall while dollar rises
Treasury short-end auctions go at rates unseen since 2008.
U.S. stocks halted a sixday rally as disappoint- ing results from Walmart weighed on major indexes as the dollar pushed higher. Treasuries fell amid a heavy slate of U.S. debt issuance, with short-end auctions drawing some of the highest yields in almost a decade.
The S&P 500 ind ex slipped below its average price for the past 50 days. Walmart sank the most since 1988, while a rally
in chipmakers boosted the Nasdaq 100 Index. The Treasury’s auctions of two-year notes and three- and six- month bills went off at rates
unseen since 2008, while the 10-year rate was up to 2.89 percent. The greenback gained versus major peers.
The U.S. Treasury on Tuesday sold $179 billion of securities as it works to rebuild its cash balance. Surging rates catalyzed one of the steep- est equity sell-offs in years two weeks ago. While investors seem to have adjusted to 10-year rates at a four-year high, the deluge of supply could push yields higher, weakening the case for owning stocks at elevated valu- ations.
While speculators are turning bearish, money managers are looking at
the highest U.S. yields in years as a buying opportu- nity in a world where shorter-term Japanese and German notes still carry negative yields. Investors will the also week meetings eral pean had damage yields, yet The to get a Reserve Central from taste U.S. come, with to from parse of stock of the both and Bank. according the higher most minutes market biggest the potential the recent Euro- bond Fed- only test this to Morgan not how described of late the the January Stanley. main bank’s the to course,” correction “Appetizer, strategists early Feb- is ruary. pullback In Europe, edged in higher the Stoxx 600 a index after equities emerged days in of Asia following Benchmarks several in
increases. and Japan more South Korea The slid than 1 percent. yen weakened. Elsewhere, WTIoil traded in New York climbed above $62 a barrel for the first time in more than a week. Bitcoin broke above $11,500, almost double its intraday low from just two weeks ago. Here are some key events scheduled for this week: The Federal Reserve will release minutes on Wednesday of its Jan. 30-31 meeting, Janet Yellen’s last as chair, where officials kept the rate unchanged. Fed policymakers speaking this week include New York Fed President William Dudley and Atlanta Fed President Raphael Bostic. Cleveland Fed President Loretta Mester is among speakers at the U.S. Monetary Policy Forum in New York City. Companies announcing earnings this week include Glencore, Woolworths, Bar- clays and Royal Bank of Scot- land. Chinese markets reopen on Thursday after holidays. These are the main moves in markets:
Stocks
The S&P 500 fell 0.6 percent as of 4 p.m. in New York.
Walmart sank 10 percent and Home Depot was little changed after its results.
The Nasdaq Composite index added 0.2 percent.
The Stoxx Europe 600 index rose 0.6 percent.
The MSCI Asia Pacific index sank 0.8 percent, the
first drop in more than a
week.
The MSCI Emerging Mar
ket index declined 0.5 percent, the biggest decline in more than a week.
Currencies
The Bloomberg Dollar Spot index increased 0.6 percent to the highest in a week.
The euro sank 0.6 percent to $1.2337, the lowest in more than a week.
The Japanese yen sank 0.6 percent to 107.262 per dollar.
South Africa’s rand
dipped 0.7 percent to 11.753 per dollar.
The MSCI Emerging Markets Currency index decreased 0.3 percent.
Bonds
The yield on 10-year Treasuries increased one basis point to 2.89 percent.
The 2-year yield rose three basis points to 2.22 percent, the highest since 2008.
Germany’s 10-year yield fell less than one basis point to 0.73 percent.
Commodities
West Texas Intermediate crude rose less than 0.4 percent to settle at $61.90 a barrel, the highest in two weeks.
Gold futures decreased 1.7 percent to $1,332.70 an ounce.