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49° Good Afternoon

Stocks slip for 3rd day; bond yields highest since May

The New York Stock Exchange on Wall Street

The New York Stock Exchange on Wall Street on Aug. 24, 2015. Photo Credit: AP

U.S. stocks slipped for the third consecutive day Thursday as media and defense companies skidded. Bond yields climbed to their highest levels since May, which helped banks and hurt stocks that pay big dividends.

ON WALL STREET: At the close, the Dow Jones industrial average fell 29.7 points, about 0.2 percent, to 18,169.7. The Standard & Poor’s 500 index sank 6.4 points, about 0.3 percent, to 2,133. The Nasdaq composite gave up 34.3 points, about 0.7 percent, to nearly 5,216.

BOND PRICES: U.S. government bond prices dropped. The yield on the 10-year Treasury note jumped to 1.85 percent from 1.79 percent a day earlier, its highest yield in almost five months. Bond prices fell and yields climbed. That helped banks, since they’ll earn more from lending as interest rates rise. It also sent high-dividend stocks like utilities and real estate companies lower as bonds become more appealing to investors seeking income.

OIL PRICES: As markets closed, the price of U.S. benchmark crude was up 54 cents at $49.72 a barrel on the New York Mercantile Exchange. In London, the price of Brent crude, the international standard, added 43 cents to $50.41 a barrel.

ANALYST’S OPINION: Scott Kimball, co-portfolio manager of the BMO TCH Core Plus Bond Fund, said investors believe that central banks will cut back on bond buying. In recent days that’s sent prices lower and yields higher. “The largest bond buyers, the biggest bond managers in the market, have been these central banks,” he said. Kimball added that yields could rise further if economic growth picks up.

MAKING MOVES: Comcast continued to fall as investors worried about competition it could face from a new online TV service like AT&T’s DirectTV Now, which was announced Tuesday. Comcast lost $1.08, or 1.7 percent, to $61.48 after falling 3 percent Wednesday. Competitor Charter Communications and TV networks like CBS and Twenty-First Century Fox also skidded. Automaker and auto parts retailers also fell, which contributed to the losses for consumer companies.

TRONC AND GANNETT: Newspaper publishers Gannett and Tronc, the company formerly known as Tribune Publishing, both slumped on reports they may not be able to combine. Bloomberg reported Thursday that banks financing the deal were not willing to help fund it. The report cited anonymous sources and said the companies were still talking. USA Today publisher Gannett dropped $1.69, or 17.1 percent, to $8.21 and Tronc fell $4.73, or 27.8 percent, to $8.21 in heavy trading.


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