Investing.com - the stock market in the United States again fell on the opening on Wednesday, since concerns about higher inflation led to an increase in the profitability of long-term bonds.
10-year Treasury bonds rose to a new 12-month high of 1.43%, despite the fact that the head of the Federal Reserve System by Jerome Powell confirmed the political position in the Senate Banking Committee, which is strongly reflation. As expected, he will again repeat it at 10:00 to East time (15:00 GRINVICHI) in his speech in the House of Representatives.
By 09:40 East time (14:40 Greenwich) Industrial Dow Jones index fell 80 points, or 0.3%, to 31.458 points. The S & P 500 index also fell by 0.3%, while Nasdaq Composite again showed a weak dynamics, falling by 0.8%.
The growth rate of bonds in the root changes the assumptions underlying the shares assessment. In recent months, the shares of technological companies, in particular, benefited from the assumption that long-term rates will remain in historically low levels over the next few years. But a 10-year-old risk rate over the past two weeks has grown by more than a quarter of a percent, which leads to a decrease in the assessments of most shares.
Thus, Apple shares (NASDAQ: AAPL) fell by 1.3%, and Amazon shares (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) fell by 1.1%.
The leaders of growth were the shares of large banks, each of which will benefit from increasing loans margin. They also evaluate their long-term loans based on bond yields, while the Federal Reserve intends to keep short-term rates at the level close to zero, at least over the next two years.
PNC Financial shares (NYSE: PNC) rose by 1.9% at the beginning of trading, Morgan Stanley shares (NYSE: MS) - by 1.6%, and Bank of America Corp (NYSE: BAC) is 1.5%.
Johnson & Johnson (NYSE: JNJ) shares also showed a positive dynamics, rising by 0.6% after the management surveillance of food and medicines (FDA) stated that a disposable vaccine against COVID-19, developed by the company, safe and efficient. This news is likely to lead to the rapid issue of the permission of regulators to use the drug in emergency situations, which will increase competition for companies such as Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA). Pfizer promotions lost 0.5%, and Moderna's paper decreased by 2.4%.
WORKHORSE GROUP (NASDAQ: WKHS) continued to fall, albeit a slower pace, dropping another 9.2% after an unsuccessful attempt to win a federal contract for electric cars to which many made rates. On Tuesday, the action lost more than half of their value, since the order was given to her competitor - Oshkosh (NYSE: OSK), whose shares rose by 6.8% at the beginning of trading.
Given that the prices for crude oil and gas are still supported by a weak dollar and sustainable reduction assumptions after a sharp cooling in Texas, Occidental Petroleum shares (NYSE: OXY) rose 5.0% to the highest level for the year.
Author Jeffrey Smith
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