Markets Right Now: After a stumble, stocks end a bit higher

Ann Santiago
February 2, 2018

Rising bond yields and a sell-off in healthcare shares sent the U.S. stock market sliding on Tuesday, with the Dow Jones Industrial Average's 352-point tumble its steepest in eight months.

Shares of healthcare-related companies dropped after, Berkshire Hathaway and JPMorgan said they plan to form a venture aimed at lowering healthcare costs for their U.

The S&P 500 Healthcare index was the day's biggest loser among the 11 major sectors, dropping by 2.13 percent.

Heading into the final hour of trade, the Dow Jones Industrial Average was down 98.85 points, or 0.37 per cent, at 26,517.86.

A surge in Boeing led Wall Street out of a two-day slump on Wednesday, but US stocks pared gains in early afternoon trading as investors awaited the Federal Reserve's comments to gauge the future path of monetary policy. Concerns are starting to enter the market that inflation could be catching up and higher interest rates could pour cold water on the bull run. The Nasdaq climbed 48 points, or 0.7 percent, to 7,451.

The Dow and S&P 500 had their biggest daily per centage declines since September 5.

Boeing shares added 5.9%, contributing more than 140 points to the Dow industrials, after the aerospace giant forecast a higher profit margin and a big rise in cash generated from record jetliner deliveries.

If yields continue to rise then stocks should drift sideways-to-lower on below average volume due to the Trump speech.

In other news, the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, rose 24.3 percent, or 2.7, to 13.77.

The dollar index fell 0.15 per cent, with the euro up 0.16 per cent to $1.2401.

The Standard & Poor's 500 index rose 15 points, or 0.6 percent, to 2,837.

Japan's Nikkei rose 0.1 per cent as the yen eased a little, while South Korea notched a record.

USA stock index futures drifted higher late on Tuesday as Trump gave his State of the Union address. The benchmark 10-year yield broke above 2.7 percent to reach its highest level since April 2014.

Harley-Davidson Inc (HOG.N) closed down 8.0% after announcing it would close a Kansas City plant in the face of declining shipments.

Apple was down another 1.1 percent in premarket trading on Tuesday, still feeling the effects of news that the company will halve production of its $999 iPhone X smartphone.

The euro, whose strength had crimped stocks late last week, eased back from its highs, but Europe's STOXX 600 index edged 0.2 per cent, as investors held their breath for the results rush.

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