US stocks struggle as declining bond yields hit banks
A three-day winning streak for US stocks ended on Thursday as a decline in bond yields sent bank stocks lower while utilities and phone companies moved higher.
Stocks traded lower all day as investors took some profits. Banks took the biggest losses, followed by metals companies.
With bond yields down, investors snapped up phone and utility company shares. Household goods makers turned higher late in the day, but that was not enough to cancel out losses elsewhere.
"There's just a little lack of confidence in the market," said Steve Quirk, executive vice president of trading for TD Ameritrade. "When you're sitting near 11 month highs and there is uncertainty, people are going to be cautious."
The Dow Jones industrial average slid 19.86 points, or 0.1%, to 17,985.19. The Standard & Poor's 500 index lost 3.64 points, or 0.2%, to 2,115.48. The Nasdaq composite declined 16.03 points, or 0.3%, to 4,958.62.
Stocks are still up for the week. Over the last few days the S&P 500 has reached its highest levels since last July and oil prices have done the same.
Bond prices rose, sending the yield on the 10-year US Treasury note down to 1.68% from 1.7% a day earlier. Lower bond yields drive down interest rates on mortgages and other kinds of loans, making them less profitable for banks.
Mortgage agency Freddie Mac reported that mortgage rates fell this week after three weeks of increases. Freddie Mac said the average 30-year fixed-rate mortgage slipped to 3.60% from 3.66% last week. A year ago the rate was 4.04%.