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Target gains after upbeat holiday-quarter sales
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Utilities, staples lead S&P 500 losses
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Indexes set for monthly losses
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Indexes: Dow down 0.36%, S&P off 0.07%, Nasdaq up 0.06%
(Updates to market open)
By Sruthi Shankar and Shristi Achar A
Feb 28 (Reuters) - The S&P 500 and Dow indexes slipped
in the final trading session of Februray as Treasury yields rose
to multi-month highs on bets of more interest rate hikes by the
Federal Reserve.
Wall Street's main indexes were set for monthly declines
after a strong performance at the start of the year as signs of
a strong U.S. economy and elevated inflation spurred worries
that the Fed will stick to its hawkish policy for longer.
Five of the 11 major S&P 500 sectors were lower on Tuesday,
with defensive utilities and consumer staples leading losses.
Traders have started to price in the possibility of a bigger
50 basis-point rate hike in March, although the odds remain low
at about 23%, according to Fed fund futures, which also suggest
rates peaking at 5.41% by September, up from 4.57% now. BofA Global Research warned the Fed could even hike interest
rates to nearly 6%.
The yield on two-year Treasury notes , which
tracks investors' expectations of the path of interest rates,
rose to 4.82%, trading just below a near four-month high hit in
the previous session. "We're talking about stickier inflation in the economy and
higher interest rates for longer. Markets still seem to think
that we're going to get rate cuts sometime in the next 12 months
and the evidence just does not support that," said Michael
Hewson, chief market analyst at CMC Markets.
Chicago Fed President Austan Goolsbee, a voter in the
rate-setting committee this year, will speak later in the day.
At 9:42 a.m. ET, the Dow Jones Industrial Average was
down 116.83 points, or 0.36%, at 32,772.26 and the S&P 500 was down 2.73 points, or 0.07%, at 3,979.51.
The tech-heavy Nasdaq Composite , however, rose 7.40
points, or 0.06%, to 11,474.38, supported by Meta Platforms and Applied Materials .
Target Corp rose 1.9% after the big-box retailer
reported a surprise rise in holiday-quarter sales but cautioned
on 2023 earnings due to an uncertain U.S. economy.
Zoom Video Communications Inc climbed 2.1% after it
forecast annual profit above Wall Street estimates and said it
will integrate more artificial intelligence into its products.
Chevron Corp slipped 0.1% even after the oil giant
raised its annual share buyback outlook to between $10 billion
and $20 billion.
Advancing issues outnumbered decliners by a 1.17-to-1 ratio
on the NYSE and 1.32-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and seven new
lows, while the Nasdaq recorded 33 new highs and 40 new lows.
(Reporting by Sruthi Shankar, Shristi Achar A and Johann M
Cherian in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun
Koyyur)
