U.S. stocks fell on Tuesday, extending losses after the S&P 500’s biggest drop in a month, as Treasury yields rose and investors looked to Apple’s product launch later in the session.
“The sell-off in bonds is definitely noteworthy, particularly in Europe. We’ve got a six-week high in the U.S. 10-year Treasury yield and a three-plus-year high in the two-year. Anything interest-rate sensitive is selling off here,” said Peter Boockvar, chief market analyst at the Lindsey Group.
Investors were also looking to Apple‘s much-anticipated product launch.
“The selling in European stocks, we’re taking our cue from that. And this afternoon we’ll see what Apple says,” said Boockvar, who noted the likely impact on the technology sector and broad market given Apple’s “huge market cap and the companies that supply it.”
“We’ll see if we’re overwhelmed or underwhelmed by Apple’s roll out. It feels like they are going to throw the kitchen sink at this one,” said Art Hogan, chief market strategist at Wunderlich Securities.
Annie’s rose in early New York trade after General Mills said it would acquire the producer of organic food for about $820 million. Barnes & Noble fell as the struggling book seller reported quarterly results.
The National Federation of Independent Business said its index of small-business optimism edged higher last month, with more owners expecting conditions to improve in coming months.
Reports later in the week could show strengthening retail sales and fewer Americans filing for jobless benefits, with the Federal Reserve monitoring the health of the economy as it tapers its bond purchases and weighs when to begin hiking rates.
Rick Rieder, chief investment officer of fundamental fixed income at BlackRock, believes the Fed could raise rates earlier than investors anticipate.
In a report emailed on Monday, Rieder said the labor market is improving, and argued against putting too much credence in weak numbers for August, writing “summer is traditionally a weak period for hiring.”
Firming inflation data also argues for the Fed to move more quickly than many expect, said Rieder, who added that “excessively low rates may be harmful to the economy.”
Fed members start their next two-day policy session in a week.
After dropping 100 points, the Dow Jones Industrial Average was lately off 75.81 points, or 0.4 percent, to 17,035.61, with Goldman Sachs Group falling hardest among the blue chips, 24 of 30 of which were in the red.
The S&P 500 fell 8.55 points, or 0.4 percent, to 1,992.99, with telecommunications, financials and utilities leading declines and energy the best performing of its 10 main industry groups.
The Nasdaq lost 18.71 points, or 0.4 percent, to 4,573.53.
The CBOE Volatility Index, a measure of investor uncertainty, rose 3 percent to 13.04.
For every stock rising, roughly three fell on the New York Stock Exchange, where 138 million shares traded as of 10:50 a.m. Eastern; composite volume hit 719 million.
On the New York Mercantile Exchange, commodity prices rose after recent losses.
Crude-oil futures for October delivery rose 58 cents, or 0.6 percent, to $93.28 a barrel, and gold futures for December gained $1.10, or 0.2 percent, to $1,255.40.
On Monday, U.S. stocks mostly declined, with energy producers leading losses on oil’s drop to a multi-month low, as investors retreated after a fifth week of gains lifted the S&P 500 to a record, with the Dow Jones Industrial Average not far behind.