“Biotechs had been an area that had been doing really well so it could be as the market has gotten worse that people are selling stuff that’s less painful to sell”. Bond prices and yields move inversely. The S&P 500 is off 27 points, or 1.4%, to sit at 1,912.
The Dow Jones industrial average lost 78.57 points, or 0.5 per cent, to 16,201.32.
“Unsurprisingly, and damningly, the day’s focus remained on the sticky situation the auto-sector finds itself in”, said Connor Campbell, analyst at Spreadex trading group, who said revelations of VW’s global pollution cheating activities had caused suspicion to also shift to other vehicle groups – fuelling BMW’s decline to 75.68 ($A120.92) per share. “When you see that, it’s one more reason to step back and be cautious”.
Yellen, who took the podium at the University of Massachusetts, Amherst on Thursday night, said the central bank is on track to raise short-term interest rates this year despite a decision last week to keep them at historic lows. Yellen’s remarks bolstered confidence the economy is sturdy enough to handle higher borrowing costs.
The main indexes declined in six of the past seven sessions, since the Federal Reserve left its key borrowing rate unchanged on Sept 17, citing concerns over slowing global growth. The dollar (http:// www.marketwatch.com/story/dollar-rises-after-feds-yellen-argues-for-rate-increase-2015-09-25) index advanced, up 0.2% to 96.19. Traders are split on whether it will happen, pricing in about a 43 percent chance of a hike in December and a roughly 51 percent probability of liftoff in January.
The stock was the biggest drag on the Dow and on the S&P 500 materials index, which was down 1.69 percent.
Nine of the 10 major S&P sectors were lower, with the materials index’s 1.41 percent fall leading the decliners.
We got some economic data this morning.
A separate report showed a late-month boost among wealthier Americans kept consumer sentiment from falling as much as forecast in September.
A sharp selloff in biotech and health-care stocks spread to broader markets, weighing on sentiment.
The CBOE Volatility index, known as Wall Street’s “fear gauge”, jumped 7.4 percent to 23.77, above its long-term average of 20. On Monday, US Democratic presidential candidate Hillary Clinton said she would announce a plan to stop “price gouging” for specialty drugs, sparking a drop in the shares.