Midday Report: US Stocks Give Up Gains as Treasury Yields Trade at Highest Level in 10 Months

Tuesday, January 12, 2021 12:33 PM | MT Newswires

US stocks fell while Treasury yields advanced to a 10-month high and oil futures remained in rally mode after midday on Tuesday.

The Dow Jones Industrial Average fell by 111.72 points, or 0.4%, to 30,892.13, after trading moderately higher earlier in the session. The S&P 500 also slipped by 0.6% to 3,779.82, also giving up earlier gains along with the Nasdaq Composite Index, which was down by 0.6% to 12,964.42. Energy was by far the biggest gainer while communication services led decliners.

The US 10-year yield increased by 3.9 basis points to 1.17%, the highest level since March. West Texas Intermediate crude oil futures jumped by 1.4% to $52.98.

The continued upward march in bond yields is likely keeping a lid on stocks after a four-day rally on Wall Street ended Monday, according to a research note from Daiwa Capital.

President-elect Joe Biden's administration is, reportedly, set to unveil a large fiscal stimulus plan on Thursday. Media reports said the president was unlikely to resign and the invocation of the 25th amendment isn't an idea that's popular with Vice President Mike Pence.

Meanwhile, US job openings fell to 6.53 million in November, according to the Bureau of Labor Statistics. While the figure was above the 6.4 million openings expected in a survey compiled by Bloomberg, it declined from 6.63 million reported in October.

Small business sentiment index tracked by the National Federation of Independent Businesses fell by 5.5 points in December to 95.9. Ian Shepherdson, chief economist at Pantheon Macroeconomics, said firms cut capital spending plans due probably to the impact of the COVID-19 pandemic. "The services economy cannot recover until the pandemic is over.".

In company news, Boston Scientific (BSX) said preliminary results show net sales of about $2.71 billion in Q4, down 6.8% on a reported basis from a year ago and also lower than the $2.87 billion average analyst estimate compiled by Capital IQ. Shares fell by almost 4% intraday, the most on S&P 500.

Intel (INTC) plans to tap Taiwan Semiconductor Manufacturing Co. (TSM) to make a second generation graphics chip for personal computers, Reuters reported late Monday, citing unidentified sources. Shares of Intel rose by 4.2%, the most on the Dow.

In the precious metals markets, gold was down 0.3% to $1,844.40 an ounce, with silver up 0.7% to $25.45 an ounce.

Among energy ETFs, the United States Oil Fund rose 1.8% to $35.90 and the United States Natural Gas Fund was up 0.5% to $10.34. Among precious-metal funds, the Market Vectors Gold Miners ETF was down 0.8% to $35.53 and SPDR Gold Shares were down 0.1% to $172.92. The iShares Silver Trust was up 1.6% to $23.57.

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