Wall Street indexes ended Wednesday trading session into the red after bond yields declined to their lowest level for more than a year, which raises alarm for a possible slowdown in the economic growth.
The blue-chip index Dow Jones Industrial Average fell by 32.14 points, 0.13%, to 25,625.59 points. The broader S&P 500 wiped out 0.46% to 2,805.37 points, while the technology Nasdaq Composite ended the trading session down by 0.63% to 7,643.38 points.
Wall Street indexes, however, opened the session with increases, backed by the news of the near 15% drop in the US trade deficit in January to 51.15 billion USD. The decrease is higher than expected and can also boost the GDP in the quarter.
The yields on 10-year US Treasury bonds reached its lowest level since December 2017 of 2.386%. The investors closely monitor bond markets as the yield curve inverted with return on 10-year Treasuries fell below 3-month Treasuries for the first time since 2007. This is the so-called reverse yield curve and is seen as an early indicator of recession.
The inversion of the yield curve came after the publication of a series of weaker economic data that has sparked new concerns about economic growth.
The bond yield declined on Wednesday after Stephen Moore, who is expected to be nominated for the Federal Reserve Board, has urged the central bank to cut interest rates by 0.5%.
Moreover, a survey showed that mortgage applications in the week ended March 22 rose by nearly 9% amid lower interest rates, according to the Mortgage Bankers Association.
Corporate stocks performance
Healthcare, utilities, and technologies were among the worst performing sectors, losing more than half a percentage point.
Abiomed and Advanced Micro Devices were among the losers in the S&P 500, with their shares declining by more than 3%.
The stocks of WellCare Health Plans rose by 12.3% after the company announced that will be acquired by its competitor Centene for 15.247 billion USD.
The shares of Verint Systems rose nearly 8% in the extended session Wednesday after it reported better-than-expected earnings and issued guidance that topped consensus estimates.
The stocks of DowDuPont fell by 0.96% after the chemical company, which was formed by the 130 billion USD merger of chemical giants Dow Chemical and DuPont in 2017, announced that is in the process of splitting itself up into three companies called Dow, DuPont and Corteva Agriscience.
Lennar Corp rose by 3.1% as the No.2 US homebuilder said it expected the housing market to improve, while shares of KB Home, which reported upbeat results late Tuesday, were up 1.7%.
The shares of Southwest Airlines bounced back from early losses to rise 2.2%. The air carrier cut its first-quarter unit revenue and capacity guidance and raised its costs outlook, citing the negative impacts of the government shutdown of Boeing’s 737 MAX 8 aircraft.
Corporate earnings reports
The software company Verint Systems reported fiscal fourth-quarter net income of 27.3 million USD, or 0.41 USD per share, compared with 17.1 million USD, or 0.26 USD per share, in the year-ago period. Adjusted for amortization and stock-based compensation, among other things, earnings were 1.08 USD per share. The company’s revenue rose to 330.2 million USD, while the adjusted for “customer engagement” and “cyber intelligence”, among other items, revenue was 336.7 million USD. For the fiscal first quarter, analysts model adjusted earnings of 0.62 USD per share and sales of 311 million USD. Verint Systems said that it was raising its full-year fiscal 2020 guidance to adjusted earnings of 3.60 USD per share and revenue of roughly 1.37 billion USD.