Stocks Drubbed on Bond Rates Rising| MENAFN.COM

Monday, 23 May 2022 09:50 GMT

Stocks Drubbed on Bond Rates Rising

(MENAFN- Stocks Drubbed on Bond Rates Rising


The major averages fell sharply Tuesday as government bond yields hit COVID-era highs and after Goldman Sachs reported disappointing earnings.
The Dow Jones Industrials landed hard 543.34 points, or 1.5%, to 35,368.47,
The S&P 500 fell 85.74 points, or 1.8%, to 4,577.11,
The NASDAQ Composite erased 386.86 points, or 2.6%, to 14,506.90, hitting its lowest level in three months.
U.S. markets were closed Monday for Martin Luther King Day.
Goldman Sachs shares dropped 7% on Tuesday after the bank missed analysts' expectations for its fourth-quarter earnings. Goldman's operating expenses surged 23% on increased pay for Wall Street employees.
Elsewhere, Microsoft dipped 2.4% after announcing the software giant will buy video game company Activision Blizzard in an all-cash transaction valued at $68.7 billion. Shares of Activision Blizzard surged 25.9%.
Retailer Gap shares fell 6.7% after Morgan Stanley downgraded the retailer.
Technology stocks declined on Tuesday, continuing their downward trend in 2022 as interest rates rise. Higher rates typically hurt growth pockets of the market that rely on low rates to borrow for investing in innovation. And their future earnings look less attractive when rates are spiking.
Tesla dropped 1.8% on Tuesday. Meta Platforms slid 4.1%, and Amazon dropped 2%.
The shortened trading week will feature quarterly reports from 35 companies in the S&P 500, including Bank of America, UnitedHealth and Netflix.
Major banks Wells Fargo, JPMorgan Chase and Citigroup kicked off the earnings season on Friday, with the three companies posting better-than-expected profits. However, the market's reaction to those results was mixed. Wells Fargo shares posted a gain on the back of those results, but JPMorgan Chase and Citigroup slid.
Overall, 33 S&P 500 companies have reported calendar fourth-quarter earnings thus far. Of those companies, nearly 70% posted bottom-line results that beat analyst expectations.
Prices for 10-year Treasurys tumbled, raising yields to 1.87% from Friday's 1.79%. Treasury prices and yields move in opposite directions.
Oil prices added $2.03 to $85.85 U.S. a barrel.
Gold prices handed back $2.70 to $1,813.80 U.S. an ounce.


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