US Market tumbles as surging yields hit growth stocks

The US shares continued downside move on Monday, 11 April 2022, dragging the Dow, the Nasdaq Composite, and the S&P500 indexes significantly below neutral line, due to the Fed's hawkish message on quantitative tightening along with lingering worries over the economic costs of war in Ukraine and a worsening coronavirus outbreak in Shanghai.

At the close of trade, the Dow Jones Industrial Average index dropped 413.04 points, or 1.19%, to 34,308.08. The S&P500 index fell 75.75 points, or 1.69%, to 4,412.53. The tech-heavy Nasdaq Composite Index sank 299.04 points, or 2.18%, to 13,411.96.

Declining stocks outnumbered advancing ones on the NYSE exchange by 2302 to 1017 and 124 closed unchanged. In the NASDAQ, 1540 issues advanced, 3200 issues declined, and 234 issues unchanged.

 

All 11 major S&P 500 sector indexes declined, with bottom performing issues were energy (down 3.1%), information technology (down 2.6%), healthcare (down 1.97%), consumer discretionary (down 1.89%), and communication services (down 1.68%).

The weak finish of Wall Street was also due to continued increase in treasury yields, with the yield on the benchmark ten-year note reaching its highest levels in three years.

Market participants were awaiting for reports on consumer and producer price inflation, retail sales and industrial production. The government is set to release the consumer price index reading for March on Tuesday, after inflation rose 7.9 percent over the 12 months to February, a multi-decade high. Accelerating prices have prompted a series of Federal Reserve officials to signal plans to increase interest rates quickly to tamp down inflation fears.

Energy stocks led lead the markets lower amid a steep drop by the price of crude oil. Crude for May delivery tumbled $3.97 to $94.29 a barrel amid concerns about the outlook for demand.

Technology stocks, which were underpinned by record low interest rates, have come under pressure on signals from the Federal Reserve that it will hike rates aggressively to control soaring inflation.

Among Indian ADR, Wipro declined 2.9% to $7.36, HDFC Bank sank 1.77% to $62, Tata Motors fell 2.75% to $29.32. WNS Holdings shed 2.56% to $84.76, Dr Reddy's Labs fell 1.7% to $57.15, ICICI Bank fell 0.4% to $19.80, INFOSYS fell 2.74% to $23.04 and Azure Power Global dropped 2.68% to $15.63.

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