Bond yields again weigh on markets

Mideast war, mixed reports on profits Wall Street factors

NEW YORK — Wall Street dropped Wednesday after rising Treasury yields tightened the vise further on the stock market and

U.S. companies delivered a mixed set of profit reports. Worries about war in the Middle East also dragged on the market.

The S&P 500 sank 1.3 percent. The Dow Jones Industrial Average dropped 332 points, or 1 percent, and the Nasdaq composite lost 1.6 percent.

Crude oil prices jumped sharply overnight after a deadly explosion at a hospital in the Gaza Strip, which sparked protests across the Middle East. Gold, meanwhile, rose as investors continue to look for safer investments after the Oct. 7 surprise attack on Israel by Hamas.

On Wall Street, United Airlines slumped 9.7 percent after it showed how big a hit to profits it may take because of surging fuel prices and the suspension of flights to Tel Aviv. It gave a profit forecast for the last three months of the year that fell well short of analysts’ expectations.

The forecast overshadowed United’s reporting a bigger profit for the summer than Wall Street had predicted.

Other airlines fell, with American Airlines down

4.9 percent and Delta Air Lines down 4.4 percent.

All told, the S&P 500 fell 58.60 to 4,314.60. The Dow dropped 332.57 to 33,665.08, and the Nasdaq sank 219.44 to 13,314.30.

The earnings reporting season for the summer is still in its early days, and the broad expectation is for S&P 500 companies to say their overall earnings per share rose last quarter for the first time in a year.

Treasury yields in the bond market have been on a steady march higher as investors accept a new normal where the Federal Reserve probably will keep interest rates high to get inflation under control. High rates and yields hurt prices for stocks and other investments.

The yield on the 10-year Treasury rose to 4.89 percent from 4.84 percent late Tuesday and from less than 3.50 percent during the spring. It topped 4.90 percent earlier in the day for the first time since since 2007.

Financial markets “are increasingly concerned that the next move higher could be on the cusp of 5 percent and whether the broader economy is equipped to assimilate” the higher costs to raise money, said Quincy Krosby, chief global strategist for LPL Financial.