Stocks fall from record highs; bond yields rise

Bloomberg

US stocks pushed lower while investors weighed the start of corporate earnings season and an influx of bond supply that loom as speedbumps to a roaring rally.
Tech shares turned lower again after Nvidia Corp. said it’s offering the company’s first server microprocessors, extending a push into Intel Corp.’s most lucrative market. Intel shares fell more than 4% on the news. The S&P 500 was mixed in the wake of a third straight week of gains for the benchmark index. In Europe, retailers and travel companies led declines on the Stoxx Europe 600 Index.
Yields were mostly higher as the US Treasury auctioned three- and 10-year notes at slightly lower demand than the previous sales of the securities. The government will offer 30-year bonds on Tuesday.
“We’re just kind of digesting,” said Marc Odo, client portfolio manager at Swan Global Investments. “This quiet period is just everyone digesting the first quarter and all of the news coming out of Washington about fiscal policy and monetary policy.”
While the U.S. recovery is accelerating, parts of Europe and South America are beset by rising Covid-19 cases and troubled vaccination rollouts. The rotation towards cyclical and small-cap stocks appears to have stalled as well, prompting worry about the strength of the US economic comeback at the start of earnings season.
“The breakdown of small caps and cyclicals is a potential early warning sign that the actual reopening of the economy will be more difficult than dreaming about it,” Morgan Stanley strategist Mike Wilson wrote in a client note.
At the same time, massive government spending and central-bank stimulus could stoke excessive inflation. In an interview aired with CBS’s 60 Minutes, Federal Reserve Chair Jerome Powell sought to provide reassurance that any surge in price pressures won’t last.
Elsewhere, oil rises after the dollar retreated. Bitcoin neared an all-time high before a listing by the largest US
cryptocurrency exchange.
The S&P 500 Index dipped 0.1% to 4,124 as of 1:49 pm New York time, the largest decrease in almost two weeks and the Dow Jones Industrial Average dipped 0.3% to 33,700.33, the biggest decrease in almost two weeks.
The Nasdaq 100 Index dipped 0.2% to 13,811.13, the largest decrease in almost two weeks.
The Nasdaq Composite Index decreased 0.4% to 13,845.88, the biggest dip in two weeks and the Stoxx Europe 600 Index sank 0.5% to 435.24, the largest decrease in more than three weeks.
The Bloomberg Dollar Spot Index falls 0.1% to 1,141.74 and the euro climbed 0.1% to $1.1916, the strongest in three weeks.
While the British pound gained 0.3% to $1.3744, the first advance in a week, the Japanese yen strengthened 0.3% to 109.39 per dollar.
The yield on two-year Treasuries advanced two basis points to 0.17%, the highest in more than a week on the biggest rise in more than a week and the yield on 10-year Treasuries gained two basis points to 1.67%, the highest in a week.
The yield on 30-year Treasuries jumped two basis points to as much as 2.35% and Germany’s 10-year yield advanced one basis point to -0.29%, the highest in more than a week.
Britain’s 10-year yield climbed two basis points to as much as 0.789%.