Growth Stocks Lead Major Indexes Lower
By Anna Hirtenstein and Akane Otani
U.S. stocks dropped Thursday, weighed down by declines in
The Dow Jones Industrial Average slumped 0.6% after closing
Wednesday at an all-time high. The S&P 500 fell 0.9%, and the
Nasdaq Composite lost 1.4%.
Stocks have wobbled the past week as investors have grappled
with a sharp and swift rise in bond yields. The shift, which money
managers have broadly attributed to bets on inflation and growth
picking up, has tempered enthusiasm for some of the pricier sectors
of the stock market.
The S&P 500 technology sector slid 1.6% Thursday, among the
worst-performing groups in the index. Meanwhile, parts of the
market thought to benefit most from rising economic growth, like
financials and energy, wobbled between small gains and losses.
"The market is jittery. The bond yields' rising is putting
equities, especially growth stocks, under pressure," said Sebastien
Galy, a macro strategist at Nordea Asset Management. "There is a
bit of a risk reduction broadly."
One group of stocks that bucked the trend: "meme stocks" that
have surged in popularity among individual investors this year.
In a wave of volatility reminiscent of last month's rally,
GameStop jumped 43%, while AMC Entertainment climbed 7%. The two
stocks had soared in overnight trading as well.
The moves show "there is still liquidity and a lot of access to
speculative bets," said Sophie Chardon, cross asset strategist at
Lombard Odier. "We have to be prepared to live with this kind of
targeted bubble, but I wouldn't see it as a threat to the global
Meanwhile, government bond prices fell, with the yield on the
benchmark 10-year Treasury note ticking up to 1.460%, from 1.388%
"The rise in yields is supportive for banks, higher oil prices
are supportive for energy. It is a change of leadership," Ms.
Overseas, the pan-continental Stoxx Europe 600 edged down
Among individual equities, beer maker Anheuser-Busch InBev fell
almost 7% after its fourth-quarter profit came in below
British packaging company DS Smith jumped over 5% on reports
that rival Mondi is exploring a takeover.
Investors have also been selling European government bonds in
recent weeks as they look for higher returns. The yield on French
10-year bonds, which moves inversely to the price, ticked up above
zero for the first time since June and reached as high as
In Asia, most major benchmarks finished the day up.
The Shanghai Composite Index added 0.6%, snapping a three-day
losing streak, and Hong Kong's Hang Seng Index climbed 1.2%.
South Korea's Kospi Index rallied 3.5% after its central bank
kept interest rates at historic lows, citing a need to continue
supporting the country's economy.
Write to Anna Hirtenstein at firstname.lastname@example.org and Akane
Otani at email@example.com
(END) Dow Jones Newswires
February 25, 2021 11:08 ET (16:08 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.