US open: Stocks sharply lower as Treasury yields continue to rise

By Sharecast News

Sharecast News | 21 Feb, 2023

Major indices were firmly in the red at the open on Tuesday as Treasury yields continued to rise.

As of 1530 GMT, the Dow Jones Industrial Average was down 1.38% at 33,360.84, while the S&P 500 lost 1.32% to 4,025.23 and the Nasdaq Composite came out the gate 1.64% weaker at 11,593.54.

The Dow opened 465.85 points lower on Tuesday after Wall Street trading was suspended on Monday in observance of the Presidents Day long weekend.

In focus early on Tuesday, the yield on the benchmark 10-year Treasury note climbed to 3.922%, while the two-year note advanced to 4.708% - building on gains recorded last week as traders digested hotter-than-expected inflation data that further exacerbated recession fears.

On the macro front, home selling activity in the US slowed for a twelfth straight month at the start of 2023. According to the National Association of Realtors, existing-home sales fell by 0.7% month-on-month in January to reach an annual rate of 4.0m - short of consensus estimates for a reading of 4.1m. In comparison to one year earlier, existing-home sales were down by 36.9%, while prices were up 1.3% at $359,000.

Elsewhere, output from America's private sector unexpectedly swung back into expansion in February after a seven-month stretch of declines. S&P Global's Composite Output Index jumped from a reading of 46.8 in January to 50.2 for February as services led the way, with the Purchasing Managers' Index for the sector increasing from 46.8 to 50.5 (consensus: 46.9). Meanwhile, the PMI for manufacturing improved from 46.9 to 47.8 (consensus: 47.0).

In the corporate space, brewer Molson Coors beat earnings per share estimates by $0.23 despite revealing that quarterly revenues had fallen, while retail giant Walmart beat on quarterly earnings as revenues topped estimates but sounded a cautious tone in regards to the economy and forecast softer-than-expected full-year earnings estimates.

Home Depot also reported revenues that fell short of estimates and issued a muted outlook.

Still to come, Hostess Brands and La-Z-Boy will report earnings after the close.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Walmart Inc. (WMT) $146.87 0.29%
Merck & Co. Inc. (MRK) $109.58 0.05%
Dowdupont Inc. (DWDP) $0.00 0.00%
Chevron Corp. (CVX) $162.59 -0.16%
Procter & Gamble Co. (PG) $139.67 -0.24%
Coca-Cola Co. (KO) $59.93 -0.32%
Amgen Inc. (AMGN) $239.60 -0.39%
McDonald's Corp. (MCD) $268.83 -0.43%
Travelers Company Inc. (TRV) $184.72 -0.55%
Visa Inc. (V) $222.05 -0.68%