By Avinash P and Purvi Agarwal
Aug 20 (Reuters) – The main U.S. stock indexes fell on Thursday as rebounding government bond yields hurt sentiment, while retail bellwether Walmart saw sharp declines after a quarterly sales miss.
Walmart lost 8.6% after missing Wall Street expectations for quarterly comparable sales as shoppers pulled back on spending in the face of rising gas prices. It dragged on the S&P 500 consumer staples index, the biggest sectoral loser, which was down 1.6%.
“Investor sentiment wavered after the company held to its conservative guidance last quarter, and the slightly raised outlook may not be sufficient to restore confidence,” said Sky Canaves, principal analyst at Emarketer.
Concerns over elevated oil prices stemming from the Iran conflict and increasing government debt battered bond and stock markets this week. The U.S. 30-year Treasury yield rose to a near-two-decade high before pulling back sharply on Wednesday, after the U.S. Treasury announced support measures for long-duration bonds.
However, relief from the Treasury intervention appeared short-lived, with the 30-year yield adding about 3 basis points to 5.239%. On the benchmark 10-year bond, it inched up as well and was last at 4.698%.
“There really wasn’t that big of a deal what he (Bessent) said… (the market is) probably looking at it now, going like that’s not really going to change or move the needle much,” said Joe Saluzzi, co-manager of trading at Themis Trading.
“As the yields start to continue to move up, equity investors will continue to have a problem with it.”
At 09:44 a.m. ET, the Dow Jones Industrial Average fell 319.61 points, or 0.60%, to 53,143.44, the S&P 500 was down 11.46 points, or 0.15%, to 7,696.52, and the Nasdaq Composite lost 77.02 points, or 0.29%, to 26,254.38.
The S&P 500 consumer discretionary sector was the biggest weight and was off 1.3%, dragged by losses in Amazon and Tesla. Gains in Nvidia and Apple helped limit declines.
Meanwhile, oil prices rose 2.3%, extending gains for the fifth consecutive session on stalled U.S.-Iran peace talks and Middle East supply disruptions.
Recent macro developments have knocked the S&P 500 and the Dow off record highs clocked earlier this month as results from companies in several sectors painted a strong picture of corporate America.
Separately, data showed the number of Americans filing claims for unemployment benefits slipped last week, suggesting the labor market remains stable.
Investors will watch for comments from St. Louis Fed President Alberto Musalem later in the day.
Minutes of the U.S. Federal Reserve’s July meeting, released on Wednesday, showed inflation concerns deepening at the central bank, with “several” policymakers ready to raise interest rates.
Among others, cryptocurrency-related companies rallied a day after U.S. President Donald Trump called on Congress to pass a crypto bill. Bitcoin hoarder Strategy added 6.6% and exchange operator Coinbase Global rose 5.6%.
Biotech company Moderna dropped more than 18% a day after surging nearly 177%.
Deere gained 3.8% after the world’s largest farm-equipment manufacturer raised its full-year net income forecast.
Declining issues outnumbered advancers by a 1.83-to-1 ratio on the NYSE and by a 1.68-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and one new low, while the Nasdaq Composite recorded 28 new highs and 29 new lows.
(Reporting by Avinash P and Purvi Agarwal in Bengaluru, additional reporting by Koyena Das; Editing by Pooja Desai)
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