Economy

U.S. stocks tumble amid rising rate fears

U.S. stocks tumble amid rising rate fears”

Oct 5 (Reuters) - U.S. stocks were little changed on Friday, kept in check by Treasury yields at seven-year highs after the September jobs report did little to alter the view that the Federal Reserve would continue to gradually raise interest rates.

The losses were led by heavyweight stocks in the technology and communication services sectors including all members of the so-called FAANG group - Facebook (FB.O), Amazon (AMZN.O), Apple (AAPL.O), Netflix (NFLX.O) and Alphabet (GOOGL.O). Intel lost 1.1 percent to $47.63 and Netflix lost 2.78 percent to $353.62.

The Department of Labor said employers added significantly more jobs in July and August than it previously thought, which made up for a slightly disappointing gain in September.

"The jobs report has become an inflation report".

The US 10-year Treasury yield climbed as high as 3.23% on Thursday to its highest level since mid-2011.

Still, U.S. stocks are trading near record levels, raising concerns about valuations with the earnings season just around the corner.

A Fed hike in December is now put at an 80% chance, while investors lifted expectations for how high rates may eventually go. Hawkish comments about the United States economy by Federal Reserve Chairman Jerome Powell have also boosted the dollar buying.

The Nikkei .n225 added 0.4 percent on bets the falling yen would boost sales and profits at Japan's many exporters.

The Indian rupee fell to new record low after the central bank kept its interest rates on hold.

US futures pointed to 0.4% opening losses for both the S&P 500 and the Dow Jones Industrial Average, after the latter benchmark hit a fresh record Wednesday. EMini futures for the S&P 500 also lost 0.4 percent in Asian trade, while European bourses were seen starting mixed. It was the biggest weekly decline for the Nasdaq since March. The S&P found support at its 50-day moving average at 2,877 and the Nasdaq at its 100-day moving average of 7,778. At the start of this year they had looked for only 2.1 percent.

The news earlier in the week that Canada had joined the USA and Mexico in successfully renegotiating the North American Free Trade Agreement has softened some of the global trade anxieties of recent months.

Generic drugmaker Mylan dipped 1.9 percent after Mizuho downgraded the stock to "neutral" from "buy".

The S&P 500 hovered around the flatline, as losses in the utilities and consumer staples sectors offset gains in the financial sector.

Tesla Motors slumped 7.1 percent after Chief Executive Elon Musk mocked the US Securities and Exchange Commission on Twitter, sparking worries that an SEC settlement on fraud charges with Musk that let him remain CEO could fall apart. Einhorn said his Tesla short was the second biggest victor last quarter.

Declining issues outnumbered advancing ones on the NYSE by a 4.18-to-1 ratio; on Nasdaq, a 3.19-to-1 ratio favoured decliners.

The WSJ Dollar Index, which measures the USA currency against a basket of 16 others, was last flat, although had consolidated its recent gains, having surged 1% in the past five trading sessions and extended its year-to-date increase to 5.2%.



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