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Stocks Wobble, Bonds at Four-Year High 04/23 16:00

   U.S. stocks couldn't hang on to an early gain and finished mostly lower 
Monday as technology companies slipped. Bond prices continue to fall and the 
yield on the 10-year Treasury note drew closer to 3 percent, a milestone it 
hasn't reached since January 2014.

   NEW YORK (AP) -- U.S. stocks couldn't hang on to an early gain and finished 
mostly lower Monday as technology companies slipped. Bond prices continue to 
fall and the yield on the 10-year Treasury note drew closer to 3 percent, a 
milestone it hasn't reached since January 2014.

   Investors once again focused on corporate deals Monday as utility company 
Vectren agreed to be bought by CenterPoint Energy for $6 billion, while the CEO 
of Sears called for the company to sell more assets and health care products 
company Henry Schein said it will split off its animal health unit. Aluminum 
producers tumbled after the Treasury Department moved to ease sanctions against 
Russian aluminum company Rusal.

   Stocks have faded over the last few days as bond yields continued to climb. 
The yield on the 10-year Treasury note continued to trade at four-year highs, 
rising to 2.98 percent from 2.96 percent. Bond yields have climbed this year as 
investors are starting to see signs that inflation is picking up and the 
Federal Reserve continues to raise interest rates. The 10-year yield stood at 
2.43 percent at the end of 2017.

   Since the global financial crisis in 2008-09, a combination of low inflation 
expectations and a bond-buying program by the Federal Reserve have helped keep 
bond yields low. That pushed stocks higher by making bonds less appealing by 
comparison. With the Fed no longer buying bonds and investors expecting greater 
inflation, analysts say higher yields could make bonds more attractive.

   Duane McAllister, senior portfolio manager for Baird Advisors, said he 
doesn't think rising yields are a problem for the stock market. He said they 
are an opportunity for investors to diversify their holdings at a time of 
increased market volatility.

   "Three percent is an important milestone on the continued trend toward 
higher interest rates," he said. "It shouldn't lead anyone, whether you're an 
individual investor or an institutional investor, to run for the hills."

   The S&P 500 index rose 0.15 points to 2,670.29. It rose as much as 12 points 
before midday. The Dow Jones industrial average fell 14.25 points, or 0.1 
percent, to 24,448.69. The Nasdaq composite gave up 17.52 points, or 0.2 
percent, to 7,128.60. The Russell 2000 index of smaller-company stocks declined 
2 points, or 0.1 percent, to 1,562.12.

   Earlier this month, a Bank of America Merrill Lynch Global Research survey 
of fund managers concluded that if the 10-year yield rises to 3.50 percent, 
investors will start buying bonds while selling stocks. And when bond yields 
rise, it pushes up interest rates on mortgages and other kinds of loans, making 
it more expensive to borrow money. That can slow down economic growth.

   Aluminum companies fell sharply after the Treasury Department extended a 
deadline for U.S. companies to stop doing business with Rusal. The department 
also said it could change its stance on sanctions against the Russian aluminum 
company if billionaire businessman Oleg Deripaska gives up control. Earlier 
this month the U.S. imposed sanctions that bar citizens from doing business 
with numerous Russian businessmen, including Deripaska, as well as several 
Russian officials and companies. That followed U.S. frustration with Russian 
policy in Syria and Ukraine, as well as alleged election interference.

   Alcoa plunged 13.5 percent to $51.90 and Century Aluminum gave up 53 percent 
to $16.72. The stocks had rallied after the sanctions were announced.

   Walmart fell 1 percent after Bloomberg reported that the retailer might 
spend $12 billion to buy the majority of Indian e-commerce company FlipKart.

   The CEO of Sears, Eddie Lampert, called for the struggling retailer to sell 
the Kenmore brand and its home improvement business. ESL Investments, Lampert's 
hedge fund, said it might buy the home improvement assets and is willing to 
make an offer for Kenmore as well. Sears has been closing stores, cutting costs 
and selling brands as its sales fall. Its stock rose 7.6 percent to $3.24.

   Health care products company Henry Schein jumped after it said it will spin 
off its animal health business. That division will combine with Vets 
FirstChoice as a new publicly traded company, and Henry Schein expects to get 
at least $1 billion in cash from the tax-free move. The stock gained 6.8 
percent to $73.79.

   Benchmark U.S. crude oil reversed an early loss and rose 0.4 percent to 
$68.64 a barrel in New York. Brent crude, used to price international oils, 
gained 0.9 percent to $74.71 per barrel in London. That helped energy companies 
finish higher. Wholesale gasoline rose 1.3 percent to $2.12 a gallon. Heating 
oil rose 0.8 percent to $2.14 a gallon. Natural gas stayed at $2.74 per 1,000 
cubic feet.

   Gold and silver prices tumbled. Gold fell 1.1 percent to $1,324 an ounce and 
silver fell 3.4 percent to $16.59 an ounce. Copper lost 0.8 percent to $3.11 a 
pound.

   The dollar rose to 108.65 yen from 107.60 yen. The euro fell to $1.2205 from 
$1.2283.

   The CAC 40 in France gained 0.5 percent. Britain's FTSE 100 rose 0.4 
percent, and Germany's DAX added 0.3 percent. Tokyo's Nikkei 225 fell 0.3 
percent and South Korea's Kospi shed 0.1 percent. Hong Kong's Hang Seng 
declined 0.5 percent.


(BE)

 
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