By Geoffrey Smith
Investing.com — U.S. stock markets opened mostly lower on Monday, as a rise in bond yields – driven by a combination of concerns around U.S. fiscal and monetary policy – weighed on most equity valuations.
The 10-year U.S. Treasury yield rose 3 basis points to touch 1.50% for the first time in three months before the stock market opened, against a backdrop of rising tension in Washington, D.C. over the funding of the federal government and President Joe Biden’s economic policy agenda.
By 9:45 AM ET (1345 GMT), the Nasdaq Composite was down 1.1% and the S&P 500 was down 0.3%, but the Dow Jones Industrial Average was up 195 points, or.0.6%, at 34,993 points, supported by banking stocks and energy stocks, the latter of which profited from a spike in prices for natural gas and, to a lesser extent, crude oil.
‘Reopening trades’ were back in vogue, with Boeing (NYSE:BA) stock rising 3.2% and Carnival (NYSE:CUK) stock rising 5.8%, while bank stocks – which perform well when rising bond yields allow them to fatten their lending margins – were also all positive. JPMorgan (NYSE:JPM) stock rose 2.3%, Citigroup (NYSE:C) stock rose 1.6% and Bank of America (NYSE:BAC) stock rose 2.8%.
Such trades appeared to be funded at least in part by rotation out of technology names, which have had a second wind during the summer as the spread of Delta-variant Covid-19 blew the economy’s reopening off-track for a while. Amazon (NASDAQ:AMZN)stock fell 2.3%, while Apple (NASDAQ:AAPL) stock fell 1.9% and Microsoft (NASDAQ:MSFT) fell 1.7%.
Facebook (NASDAQ:FB) stock fell 1.3% after the company said it would pause work on Instagram Kids, following a public outcry at revelations about the company’s governance, notably its failure to react to internal analysis showing the negative impact of Instagram on teenagers’ mental health.
Gores Guggenheim (NASDAQ:GGPI) stock rose 2.3% after the SPAC said it will take luxury EV maker Polestar, a unit of Volvo Cars, public through a merger that values the company at $20 billion including debt.
Elsewhere, Gannett (NYSE:GCI) stock rose 3.6% to test a two-year high after saying it will refinance at least $500 million of debt with a new issue of senior secured notes, bringing down the USA Today’s debt servicing costs still further.