Thursday’s Trading – Facebook Sank Tech Stocks, Treasury Yields Rose
Jul 26, 2018
U.S. stocks finished mixed Wednesday and Treasury yields finished higher despite spending most of the session below the prior day’s closing values. The Dow gained 0.4% to close at 25,527, its highest level since February 26. A day after the U.S. and EU signaled a willingness to work on a trade deal, industrials and materials led the index with greater-than-1% gains. The S&P 500 fell 0.3% as sharp losses in technology offset gains in seven of the other 11 session. Utilities rose 1.1% while energy companies closed up 1.0% in a close second finish. Tech companies sank 1.6%, primarily in response to a historic day for shares of Facebook Inc. The social media giant went from hero to zero in less than 24 hours after a calamitous quarterly earnings release. The company reached an all-time high Wednesday but was down nearly 19% by Thursday’s close.
The ripple effect through other tech names sent the Nasdaq down 1.0%. Treasury yields fell and recovered with European yields in response to the ECB’ latest (uneventful) decision before pushing to close near their highs of the day for a second session. The 2-year yield rose for a fifth session, adding 1.2 bps to a new cycle high of 2.69%. The 10-year yield moved up 0.2 bps to 2.98%, its highest level since May 24.