US Market extends selloff as spike in treasury yields

The US share market finished session significantly in the red on Monday, 15 April 2024, extending the steep drop seen last Friday, amid renewed concerns about the outlook for interest rates after stronger than expected retail sales data triggered another spike by treasury yields.

Also weighing on investor sentiment was concerns about rising geopolitical tensions between Iran and Israel after Irans launch of drones and missiles at Israel on Saturday night, marking the first direct attack on Israel from Iranian territory.

At closing bell, the Dow Jones Industrial Average index stumbled 248.13 points, or 0.65%, to 37,735.11. The S&P500 index retreated 61.59 points, or 1.2%, to 5,061.82. The tech-heavy Nasdaq Composite index decreased by 290.08 points, or 1.79%, to 15,885.02.

All 11 major S&P 500 sectors closed lower, with information technology sector suffered the largest losses in percentage term, falling 2%, followed by real estate (down 1.77%), communication services (down 1.63%), and consumer discretionary (down 1.62%) sectors.

Among individual stocks, Goldman Sachs rose 2.9% after posting better than expected first-quarter profit, fueled by a recovery in underwriting, deals and bond trading.

Shares of M&T Bank jumped 4.7% after forecasting better-than-expected annual net interest income (NII), while brokerage Charles Schwab advanced 1.7% despite reporting a fall in quarterly profit.

ECONOMIC NEWS: US Retail Sales Climb 0.7% In March- The Commerce Department released a report on Monday showing U.S. retail sales increased by much more than expected in the month of March. The report said retail sales climbed by 0.7% in March after advancing by an upwardly revised 0.9% in February. The stronger than expected retail sales growth came despite a pullback in sales by motor vehicle and parts dealers, which slid by 0.7% in March after spiking by 2.5% in February. Excluding the decrease in auto sales retail sales jumped by 1.1% in March after climbing by 0.6% in February. The sharp increase in ex-auto sales partly reflected a 2.7% spike in sales by non-store retailers along with a 2.1% surge in sales by miscellaneous store retailers. The report also showed sales by gas stations shot up by 2.1% in March after jumping by 1.6% in February amid higher gas prices. While sales by general merchandise stores also saw a notable increase, sales by sporting goods, hobby, musical instrument, and book stores; clothing and accessories stores; and electronics and appliance stores slumped. The report also said core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.1% in March after rising by 0.3% in February.

US Homebuilder Confidence Remains Unchanged In April- Homebuilder confidence in the U.S. came in flat in the month of April, the National Association of Home Builders revealed in a report released on Monday. The report said the NAHB/Wells Fargo Housing Market Index came in at 51 in April, unchanged from March. The unchanged reading halts a four-month advance by the housing market index, which reached its highest level since last July in the previous month. The housing market index came in unchanged compared to the previous month amid a mixed performance by the three component indices. While the index charting current sales conditions and the component gauging traffic of prospective buyers both inched up by one point to 57 and 35, respectively, the component measuring sales expectations in the next six months fell two points to 60.

US Business Inventories Rise 0.4% In February- Business inventories in the U.S. increased by slightly more than expected in the month of February, according to a report released by the Commerce Department on Monday. The Commerce Department said business inventories climbed by 0.4% in February after coming in unchanged in January. The bigger than expected increase in business inventories came as retail and wholesale inventories advanced by 0.6% and 0.5%, respectively, while wholesale inventories rose by 0.3%. The report also showed a notable rebound by business sales, which jumped by 1.6% in February after slumping by 1.0% in January. Wholesale sales surged by 2.3% during the month, while manufacturing and retail sales shot up by 1.4% and 1%, respectively. With sales jumping by much more than inventories, the total business inventories/sales ratio edge down to 1.38 in February from 1.39 in January.

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