A currency trader walks near the screen showing the Korea Composite Stock Price Index (KOSPI), at the foreign exchange dealing room in Seoul, South Korea, Thursday, Feb. 18, 2021. Shares were mostly lower in Asia on Thursday after a mixed session on Wall Street as losses by technology and industrial companies offset other gains.
Screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won are seen at the foreign exchange dealing room in Seoul, South Korea, Thursday, Feb. 18, 2021. Shares were mostly lower in Asia on Thursday after a mixed session on Wall Street as losses by technology and industrial companies offset other gains.
A currency trader watches computer monitors at the foreign exchange dealing room in Seoul, South Korea, Thursday, Feb. 18, 2021. Shares were mostly lower in Asia on Thursday after a mixed session on Wall Street as losses by technology and industrial companies offset other gains.
A currency trader walks near the screens showing the foreign exchange rates at the foreign exchange dealing room in Seoul, South Korea, Thursday, Feb. 18, 2021. Shares were mostly lower in Asia on Thursday after a mixed session on Wall Street as losses by technology and industrial companies offset other gains.
FILE – This Nov. 23, 2020 file photo shows the New York Stock Exchange, right, in New York. Stocks are giving back some of their recent gains in early trading on Wall Street Wednesday, Feb. 17, not far below the record highs major indexes set in recent days.
FILE – A man walks past the New York Stock Exchange during a snowstorm, Monday, Feb. 1, 2021, in New York. Stocks are opening broadly lower on Wall Street and Treasury yields continued to climb. The S&P 500 index gave up 0.8% in the first few minutes of trading Thursday, Feb. 18, and the tech-heavy Nasdaq was down slightly more, 1.1%.
Stocks are broadly lower in afternoon trading Thursday as investors are discouraged by economic data that showed continuing pain for recession-impacted Americans as well as the steady rise of bond yields.
The S&P 500 index lost 0.9% as of 1:10 p.m. Eastern. The Dow Jones Industrial Average was down 0.9% and the technology-heavy Nasdaq Composite was down 1.4%. The Russell 2000 index of small companies was down 1.6%.
Energy prices declined for a second day, as the frigid temperatures that impacted Texas and much of the Midwest moved east. Natural gas prices were down 4%. Energy prices have been volatile the past week as record demand for natural gas and other fossil fuels to warm homes has caused electricity prices to skyrocket. Natural gas is typically used as an “on-demand” fuel source to cover increased electrical needs.
Bond yields continue to climb, as murmurs of inflation have started among investors and as the economy continues to climb out of the hole that was created by the pandemic. The yield on the 10-year U.S. Treasury note was at 1.30%, nearly double where it was last fall. It’s now trading at levels seen before the March 2020 pandemic shutdowns.
The climb in bond yields has multiple impacts on the market. When bonds pay higher yields, they are more attractive to a broader group of investors, who tend to move money out of low-performing stocks and into the steady income of bonds. It’s a push-pull phenomenon that’s existed in the market for decades. With bonds no longer paying out rock-bottom yields, the inverse relationship betweens stocks and bonds could be reasserting itself.
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