Tech, health care lead stocks lower

Daniel Fowler
May 16, 2018

The Dow lost 193 points, or 0.8 percent, to 24,706.41.

Australian stocks bucked the region's downward trend, rising 0.4%. Smaller rival Lowe's Companies Inc (LOW.N) was down 1.0 percent. The Nasdaq is up 4 percent. The Nasdaq fell 59 points, or 0.8 percent, to 7,351.

On Tuesday, it was the bond market that appeared to hold investors' focus. That's the highest level since July 2011 for the yield, which is used to set interest rates on mortgages and other kinds of loans.

On the economic front, advance estimates of U.S. retail and food services sales for April were 497.6 billion U.S. dollars, an increase of 0.3 percent from the previous month, in line with market expectations, said U.S. Commerce Department on Tuesday.

The S&P 500 index fell 18 points, or 0.7 percent, to 2,712. The retail sales data suggest consumers are spending more after a weak first quarter.

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"A combination of firm growth and higher interest rates is unnerving", said Anthony Chan, chief economist for Chase in NY. Some Fed-watchers have been cautioning that any lasting uptick in inflation or economic growth might spur the Fed to pursue an additional rate increase before year's end.

"A little bit of today's jitters are related to a hangover to yesterday's wrongly placed exuberance that a trade deal was imminent, and the reality is we are in for a long slugfest between the USA and China", said Jon Mackay, investment strategist at Schroders North America in NY.

Stocks struggled to a mixed finish on Wall Street as weakness in smaller-company stocks offset gains in large companies. Essex Property Trust fell 3.4 percent to $233.78. It also put investors in the mood to sell stocks in home builders. A move in the yield above 2.9 percent earlier this year triggered a correction for US equities. Higher mortgage rates can make it harder for would-be buyers to purchase a home. Real estate, healthcare and technology stocks posted the biggest percentage losses.

Stocks are opening moderately higher on Wall Street, led by gains in technology, health care and energy companies. Chip maker Nvidia fell 3.8 percent; drug maker Celgene slid 3.9 percent. Brent crude, used to price global oil, added 20 cents to $78.43 in London.

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