U.S. Stocks Seeing Further Downside Amid Worries About Treasury Yields

After moving mostly lower over the two previous sessions, stocks are seeing further downside during trading on Friday. With the drop, the tech-heavy Nasdaq is on pace to end the session at its lowest closing level in over four months.

In recent trading, the major averages have fallen to new lows for the session. The Nasdaq is down 142.77 points or 1.1 percent at 13,043.41, the S&P 500 is down 36.44 points or 0.9 percent at 4,241.56 and the Dow is down 179.93 points or 0.5 percent at 33,234.24.

The continued weakness on Wall Street comes amid ongoing concerns about the recent surge in treasury yields to sixteen-year highs.

Overnight, the yield on the benchmark ten-year note climbed above 5 percent for the first time since July 2007 but has given back ground since then.

The recent advance by yields reflects continued worries about the outlook for interest rates, with the Federal Reserve signaling rates will remain higher for longer than previously anticipated.

During a speech on Thursday, Fed Chair Jerome Powell described inflation as “still too high” and warned additional monetary policy tightening may be needed.

Powell also reiterated Fed officials are willing to keeping policy restrictive until they are confident inflation is on a downward path.

A report on personal income and spending in the month of September is likely to be in focus next week, as it includes readings on inflation said to be preferred by the Fed.

Sector News

Oil service stocks have moved sharply lower despite an increase by the price of crude oil, with the Philadelphia Oil Service Index plunging by 2.9 percent.

A steep drop by Schlumberger (SLB) is weighing on the sector after the company reported third quarter earnings that beat analyst estimates but weaker than expected revenues.

Banking stocks are also seeing considerable weakness, dragging the KBW Bank Index down by 2.3 percent to a five-month intraday low.

Significant weakness is also visible among computer hardware stocks, as reflected by the 1.9…