U.S. stocks open lower as 10-year yield hits fresh high
NEW YORK, Oct. 9 (Xinhua) - U.S. stocks opened lower on Tuesday as concerns over rising interest rates damped investor sentiment.
Shortly after the opening bell, the Dow Jones Industrial Average was down 65.22 points, or 0.25 percent, to 26,421.56. The S&P 500 erased 2.93 points, or 0.10 percent, to 2,881.50. The Nasdaq Composite Index decreased 7.44 points, or 0.10 percent, to 7,728.51.
The benchmark 10-year Treasury note yield rose to 3.26 percent on Tuesday, its highest level since 2011, before slipping to 3.22 percent.
Investors have been grappling with higher interest rates after a batch of strong economic data came out last week.
The unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, the U.S. labor department said on Friday.
In September, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to 27.24 U.S. dollars. Over the year, average hourly earnings have increased by 73 cents, or 2.8 percent.
Fed Chair Jerome Powell last week said that the U.S. central bank had a long way to go before interest rates hit neutral, indicating that more hikes could be on the horizon.
Strong data and commentary from Fed officials can be bullish for equities, but that comes with the side effect of having concerns on more inflation and interest-rate increases, which in turn is a negative for equities, experts noted.
The recent rise in interest rates comes as investors brace for the upcoming earnings season, with J.P. Morgan Chase, Citigroup and Wells Fargo scheduled to report later this week.
Third quarter earnings are expected to increase 21.5 percent from the same period last week. Excluding the energy sector, the earnings growth estimate declines to 18.5 percent, according to Thomson Reuters.