U.S. stocks fell at the open on Wednesday morning as higher yields continued to put pressure on high-flying tech stocks.
The Dow Jones Industrial Averaged shed 100 points, or about 0.3%. The S&P 500 lost 0.4%, while the tech-heavy Nasdaq Composite slid 0.8%.
Traditional retail stocks took a hit following poor quarterly results. Gap lost 22% and Nordstrom tumbled about 26% in early trading. Both companies reported earnings misses for the most recent quarter.
Yields have been rising since President Joe Biden’s renomination of Jerome Powell as chairman of the Federal Reserve on Monday. The 10-year Treasury yield ended last week at 1.55% and was last at 1.68% Wednesday.
The move in rates has sent investors fleeing from tech and growth shares, while boosting some bank stocks and energy shares. The divided market has left the Dow in the green for the week so far, the S&P 500 slightly lower and the Nasdaq Composite down more than 2%.
“It’s certainly a story of more rotation,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “The market is now — with the Powell renomination — thinking this is a reopening story, which sets aside any of the risks or concerns we might have about rising Covid infection rates.”
The market did receive some positive news on the economic front. Initial jobless claims for the prior week came in at 199,000, the lowest level in more than 50 years. GDP growth for the third quarter was revised up slightly to 2.1%. Personal income and consumer spending both rose more than expected.
The data was not uniformly positive, however, as durable goods orders showed an unexpected decline in October, according to the Census Bureau. Core PCE, the Fed’s preferred inflation measure, was up 4.1% year over year for October, matching estimates.
Rising Covid cases in Europe continued to worry investors. Germany was considering a full Covid lockdown.
Tesla shares were lower again after Elon Musk sold another $1 billion in stock. Software stock Autodesk fell 15% after the company issued disappointing fourth-quarter guidance.
Computer hardware company HP’s shares got a more than 9% lift after reporting earnings that beat on the top and bottom lines and issuing higher first-quarter earnings guidance.
Later on Wednesday, investors will be looking through the minutes from the latest Fed meeting.
U.S. markets are closed Thursday for Thanksgiving and will close early on Friday in a shortened session.