How major U.S. stock indexes fared on Wednesday

How major U.S. stock indexes fared on Wednesday

Rising bond yields and a sell-off in healthcare shares sent the USA stock market sliding on Tuesday, with the Dow Jones Industrial Average's 352-point tumble its steepest in eight months.

Shares of healthcare-related companies tumbled after, Berkshire Hathaway and JPMorgan said they plan to form a venture aimed at lowering healthcare costs for their USA employees.

In the broad market, the health care, energy and financial sectors led losses for the day. The Dow Jones Industrial Average declined 38 points, or 0.1%, to 26,572.

A surge in Boeing led Wall Street out of a two-day slump on Wednesday, but USA stocks pared gains in early afternoon trading as investors awaited the Federal Reserve's comments to gauge the future path of monetary policy.

Investors were phased by the two day decline on Wall Street, as Gennadiy Goldberg, interest rates strategist at TD Securities in NY said this pushed people in to the arms of the safety of USA government bonds.

Pointing to the chart below, Higgins says "it is quite common for interest rates, government bond yields and equity prices to rise at the same time", adding the caveat that it usually requires investors to have a "growing appetite for risk and a positive view of corporate earnings".

The S&P 500's remarkable 7-percent rally this year up to Friday's close has also driven up a measure of anxiety in the market, in a break with history.

US stocks retreat from records ahead of packed week for corporate earnings
This chart shows there's nothing unusual about US stocks and bond yields rising at the same time

The Dow and S&P 500 had their biggest daily per centage declines since September 5.

But, the blue-chip index clawed back as much as 200 points earlier on Wednesday. USA stocks experienced a spectacular reversal and plummeted overnight, as the U.S. 10 year treasury yield pushed relentlessly higher. Caterpillar's 2.3 per cent drop weighed the most on the index.

The S&P 500 is up 150.20 points, or 5.6 percent. The Japanese yen strengthened 0.17 per cent versus the greenback at 108.79 per dollar. That came as Boeing surged 6.9 percent to record high after the planemaker's full-year profit forecast easily topped estimates. The Dow Jones Small-Cap Growth TSM Index closed at 9,817.83 for a loss of -109.38 or -1.10%.

Harley-Davidson Inc closed down 8.0 percent after announcing it would close a Kansas City plant in the face of declining shipments.

Advancing issues outnumbered decliners on the NYSE by 1,567 to 1,298.

The S&P 500 posted 126 new 52-week highs and three new lows; the Nasdaq Composite recorded 153 new highs and 29 new lows. Drug stocks such as Eli Lilly and Merck slumped on Wednesday, while the iShares NASDAQ Biotechnology ETF retreated 1%.

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