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U.S. stocks retreat as yields on bonds rise

Trader Michael Milano works on the floor of

Trader Michael Milano works on the floor of the New York Stock Exchange, Tuesday, Jan. 17, 2017.  Credit: AP / Richard Drew

Stock indexes ended the day with losses Thursday as higher bond yields dealt a blow to high-dividend stocks like real estate companies. Railroad stocks were the exception, moving higher.

ON WALL STREET: At the close, the Standard & Poor’s 500 index was down 8.2 points, about 0.4 percent, to 2,263.7. The Dow Jones industrial average was off 72.3 points, about 0.4 percent at 19,732.4. The Nasdaq composite was down 15.6 points, about 0.3 percent, at 5,540.1.

BOND PRICES: Bond prices fell. At the market’s close, the yield on the 10-year Treasury note was 2.459 percent.

MAKING MOVES: CSX soared 23 percent after it posted better results and reports that an activist investor is planning to target the company. Union Pacific was up 2.4 percent at the close after reporting earnings that beat analysts’ expectations. Netflix was up 3.9 percent at the close after its results came in ahead of forecasts.

OIL PRICES: At midday, benchmark U.S. crude oil was up 33 cents at $51.41 a barrel in electronic trading on the New York Mercantile Exchange. In London on the Intercontinental Exchange Europe, Brent crude, the international standard, rose 25 cents to $54.17 a barrel.

TRUMP WATCH: After a torrid postelection rally, markets are subdued as they wait for Trump to take the oath of office on Friday. Investors are waiting to see how much of his campaign-trail rhetoric will become government policy.

Uncertainties over future U.S. trade policy deepened after Trump’s nominee for commerce secretary, billionaire investor Wilbur Ross, slammed China as the “most protectionist” country. “And it’s one thing to talk about free trade. We would like to have our trading partners also practice free trade and do it in a more balanced manner than has been done at present,” Ross told a Senate hearing on his confirmation.

THE QUOTE: “Equity markets have been trading flat ahead of the U.S. presidential inauguration, while the U.S. Treasuries sold off, but certainly, there’s a sense that the postelection honeymoon is over,” Stephen Innes, a senior trader at OANDA, said in a research note. “While the inauguration is dominating headlines, simmering on the back burner is the overriding theme of US protectionism, expressly directed at China.”


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