Stocks Up, Bond Yields Set 4-Year Highs04/23 12:10
U.S. stocks are rising Monday with health care and technology companies and
retailers leading the way.
NEW YORK (AP) -- U.S. stocks are rising Monday with health care and
technology companies and retailers leading the way. Bond prices continue to
fall and the yield on the 10-year Treasury note is getting close to 3 percent,
a milestone it hasn't reached since January 2014. Aluminum producers are
sinking after the Treasury Department moved to ease sanctions against Russian
aluminum company Rusal.
KEEPING SCORE: The S&P 500 index picked up 7 points, or 0.3 percent, to
2,677 as of 12:15 p.m. Eastern time. The Dow Jones industrial average added 14
points, or 0.1 percent, to 24,477. The Nasdaq composite rose 25 points, or 0.4
percent, to 7,171. The Russell 2000 index of smaller-company stocks gained 1
point, or 0.1 percent, to 1,565.
BONDS: Bond yields slipped again. The yield on the 10-year Treasury note
continued to trade at four-year highs, rising to 2.98 percent from 2.96
percent. Bond yields have climbed this year as investors are starting to see
signs that inflation is picking up and the Federal Reserve continues to raise
interest rates. The 10-year yield stood at 2.43 percent at the end of 2017.
Since the global financial crisis in 2008-09, a combination of low inflation
expectations and a bond-buying program by the Federal Reserve have kept bond
yields low. That made bonds less appealing to investors and helped push stocks
higher. With the Fed no longer buying bonds and expectations of inflation
increasing, analysts say higher yields could make bonds more attractive, which
could affect stock prices.
ALUMINUM FOILED: The Treasury Department extended a deadline for U.S.
companies to stop doing business with Rusal, and also said it could change its
stance on sanctions against the company if billionaire businessman Oleg
Deripaska gives up control. Earlier this month the U.S. imposed sanctions
barring citizens from doing business with numerous Russian businessmen,
including Deripaska, as well as several Russian officials and companies. That
followed U.S. frustration with Russian policy in Syria and Ukraine, as well as
alleged election interference.
Alcoa plunged 11.7 percent to $52.96 and Century Aluminum gave up 2.3
percent to $17.24. Engineered products company Arconic fell 3.7 percent to
GETTING TOGETHER? Utility Vectren gained 6.3 percent to $69.71 after it
accepted an offer from rival CenterPoint Energy worth almost $6 billion, or $72
a share. The combined company will have 7 million gas and electricity customers
in eight states. Houston-based CenterPoint has natural gas operations in
Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texts. It has
delivers electricity in the Houston area. CenterPoint fell 2.5 percent to
Offshore drilling platform maker McDermott International jumped 12.6 percent
to $6.81 after it said it rejected an offer from Subsea 7 SA. Earlier this year
it accepted a bid from Chicago Bridge & Iron valued at $6 billion.
Bloomberg reported that Walmart is close to buying a majority stake in
Indian e-commerce company FlipKart for $12 billion. Walmart dipped 0.6 percent
SPLITTING UP: Sears' largest shareholder asked the struggling retailer to
sell the Kenmore brand and its home improvement business. ESL Investments, the
hedge fund run by Sears CEO Eddie Lampert, said it might buy those assets.
Sears has been closing stores, cutting costs and selling brands as its sales
fall. The company acknowledged that it received ESL's request and its stock
rose 4.1 percent to $3.13.
Health care products company Henry Schein jumped after it said it will spin
off its animal health business. That division will combine with Vets
FirstChoice as a new publicly traded company, and Henry Schein expects to get
at least $1 billion in cash from the tax-free move. The stock gained 6.8
percent to $73.75.
MISFIT TOYS: Hasbro said its revenue plunged 16 percent in the first
quarter, a far bigger decline than Wall Street expected, as toymakers continue
to struggle following the demise of Toys R Us. Hasbro said it took a loss over
the last three months. The stock fell in early trading, as did rival Mattel,
but after months of losses for both stocks, investors found reasons for some
optimism. Hasbro gained 2.9 percent to $85.23 and Mattel added 3.7 percent to
COMMODITIES: Energy companies lagged the rest of the market as benchmark
U.S. crude dropped 38 cents to $68.02 a barrel in New York while Brent crude,
used to price international oils, lost 17 cents to $73.89 per barrel in London.
Gold and silver prices tumbled. Gold fell 1 percent to $1,324.30 an ounce and
silver fell 3.1 percent to $16.63 an ounce.
CURRENCIES: The dollar rose to 108.60 yen from 107.60 yen. The euro fell to
$1.2220 from $1.2283.
OVERSEAS: The CAC 40 in France gained 0.5 percent. Britain's FTSE 100 rose
0.4 percent, and Germany's DAX added 0.3 percent. Tokyo's Nikkei 225 fell 0.3
percent and South Korea's Kospi shed 0.1 percent. Hong Kong's Hang Seng
declined 0.5 percent.