Rising Treasury yields and coronavirus concerns sent Wall Street south Thursday. The benchmark Treasury yield spiked to a 14-month high one day after the Fed ramped up its U.S. growth forecast, and that hurt rate-sensitive tech stocks like Apple and Amazon. Stocks tumbled further after France declared a lockdown in Paris and other regions.
The Nasdaq dropped 3%. The S&P 500 and Dow both retreated from record highs, with the S&P down 1-and-a-half percent and the blue chip index falling a half percent.
Thomson Reuters technical analyst Terence Gabriel says the charts signal that Treasury yields will continue to rise even though the Fed has vowed to keep rates low.
“It continues to be a situation where we have to watch rising yields very closely but also watching levels on the Nasdaq given that that index peaked in mid-February.”
Over on the Big Board, Dollar General shares dropped nearly 5%. The discount retailer warned that the rush to stock up on cheaper goods amid the health crisis may be waning faster than expected as the economy reopens.
But shares of AMC Entertainment, which got slammed last year as people stayed home, rose 3%. The movie theater operator said 98% of its U.S. locations would be open starting Friday.