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VOL. 42 | NO. 39 | Friday, September 28, 2018

Global stocks slip as US Treasury yields surge

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NEW YORK (AP) — Global stocks are falling Thursday as interest rates in the U.S. continue to rise. In the U.S., internet and technology companies and high-dividend stocks are falling. The yield on the 10-year Treasury note is rising further after hitting a seven-year high a day ago.

KEEPING SCORE: The S&P 500 index skidded 17 points, or 0.6 percent, to 2,907 as of 10:15 a.m. Eastern time. The Dow Jones Industrial Average lost 186 points, or 0.7 percent, to 26,642. The Nasdaq composite fell 84 points, or 1.1 percent, to 7,940. The Russell 2000 index of smaller-company stocks gave up 12 points, or 0.8 percent, to 1,658.

BONDS SURGE: Bond prices fell again. The yield on the 10-year Treasury note climbed to 3.18 percent from 3.16 percent. The 10-year yield is at its highest level in more than seven years following encouraging signs on hiring by private companies and growth for services companies.

That data suggests the economy should keep growing at a solid pace. That translates to bigger profits for U.S. companies and continued increases in interest rates by the Federal Reserve, which raises rates to keep inflation in check. But as interest rates continue to rise, it becomes more expensive for consumers and businesses to borrow money, and growth gradually slows.

BANK RALLY: Banks surged for a second day as higher yields mean they make bigger profits on mortgages and other types of loans. JPMorgan Chase gained 1.5 percent to $116 and Bank of America added 1.8 percent to $30.55.

The S&P banking index has surged 2.5 percent over the last two days while the broader S&P 500 is lower. European banks including Barclays and HSBC also climbed.

Among technology companies, Apple fell 0.9 percent to $229.89 and Microsoft lost 1.2 percent to $113.84. Facebook sank 1.5 percent to $160.03 and Alphabet, Google's parent company, lost 2.3 percent to $1,183.94.

OVERSEAS: France's CAC 40 sank 1.1 percent and Britain's FTSE 100 tumbled 0.9 percent. The DAX in Germany added 0.1 percent resumed after a national holiday.

Hong Kong's Hang Seng index sank 1.7 percent and Japan's Nikkei 225 index lost 0.6 percent while the Kospi in South Korea sank 1.5 percent.

BOOK SALE?: Barnes & Noble climbed 23.6 percent to $6.75 after the bookseller said it will review offers from potential buyers, including one from founder and chairman Leonard Riggio, the company's biggest shareholder. Even after Thursday's gain, Barnes & Noble stock is essentially flat in 2018 and has lost almost two-thirds of its value since July 2015.

HORTON HEARS A DEAL: Business software companies Hortonworks and Cloudera said they agreed to combine in an all-stock deal. Cloudera shareholders will own most of the new company, which the two sides said will be worth $5.2 billion. Cloudera rose 12.7 percent to $19.25 and Hortonworks added 12.8 percent to $24.69.

DRINK TO THAT: Beer and wine maker Constellation Brands climbed 4.8 percent to $220.81 after its second-quarter profit surpassed Wall Street projections.

DIABETES DRUG: Eli Lilly gained 4.4 percent to $113.42 after it reported strong results from an experimental diabetes drug. The company said patients with type 2 diabetes experienced meaningful reductions in blood sugar and body weight.

INDIAN SELL-OFF: Shares sank in India as the rupee continued to weaken and investors worried about the country's trade deficit thanks to surging costs for oil imports. The Sensex index fell 2.2 percent.

ENERGY: Benchmark U.S. crude fell 0.8 percent to $75.78 per barrel in New York. U.S. crude hit four-year highs this week. Brent crude, used to price international oils, lost 0.7 percent to $85.65 per barrel in London.

CURRENCIES: The dollar fell to 113.81 yen from 114.34. The euro rose to $1.1524 from $1.1517.

____

AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay

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