US close: Stocks mixed as 10-year Treasury yield jumps nine basis points
Wall Street stocks turned in a mixed performance on Tuesday as the Dow Jones managed to extend its February rally a little further.
At the close, the Dow Jones Industrial Average was up 0.20% at 31,522.75, while the S&P 500 was 0.06% softer at 3,932.59 and the Nasdaq Composite saw out the session 0.34% weaker at 14,047.50.
The Dow closed 64.35 points higher on Tuesday after traders took a break on Monday in observance of George Washington's Birthday.
In focus on Tuesday, the Cboe Volatility Index, considered to be the Street's best fear gauge, fell to 19.97 on Friday, the first breach of the 20-point threshold since the Covid-19 pandemic began in 2020, a move seen by some as a big "risk on" signal, one which could potentially trigger buying from algorithmic traders. It crossed the line again on Tuesday, hitting 21.
However, the main driver of the day's moves was news that the 10-year Treasury yield jumped nine basis points to top 1.30%, a high watermark last seen in February 2020, while the 30-year rate also hit its highest level in a year.
Worries that a rebound in rates might possible weigh on the US' economic recovery from the Covid-19 pandemic-induced recession were already doing the rounds, while others mulled over whether or not a deluge of fiscal stimulus could possibly spark a run on prices following a decade of dormant inflation.
On the macro front, manufacturing activity in the state of New York expanded at a quicker month-on-month pace in February, snapping a four-month decline, according to the Federal Reserve Bank of New York. The Empire State Manufacturing Survey's general business conditions index increased to 12.1 in February, up from 3.5 in January to the highest level since September and well ahead of estimates for a print of 5.9.
In the corporate space, CVS Health beat on both profit and revenue expectations, partly due to having administered more than 3.0m Covid-19 vaccinations, while restaurant chain Denny's reported an operating loss of $1.1m for the fourth quarter after the close.