US: Dow lower for first time in nine sessions

[NEW YORK] The benchmark Dow index opened lower for the first time in nine sessions on Tuesday, posting its biggest drop in two weeks, as inflation fears returned to the market.

The 10-year US Treasury note moved back above three percent and oil prices are moving higher, which combined to sap investor optimism of recent days.

About 15 minutes into the trading session, the Dow Jones Industrial Average had dropped more than 0.7 per cent to 24,720.98, and the S&P 500 lost 0.76 pe rcent to 2,709.28, the first decline in several sessions.

The tech-dominant Nasdaq dropped one per cent to 7,335.47.

In addition to the upward move in the Treasury rate, the New York Federal Reserve Bank's survey of business conditions showed a big jump in the price index.

This reignited investor concern that inflation will accelerate, causing the Fed to be more aggressive about raising interest rates.

The "'inflation concern' narrative has been stoked again this morning along with the concern about rising interest rates," said Patrick J O'Hare of Briefing.com.

"Those are the two main elements behind the weakness in the futures market and they are why the bulls are in a rest mode for now."

In other data, US retail sales slowed in April but still posted a solid gain, despite tepid car sales, while the results for March were stronger than initially reported, which bodes well for GDP growth in the second quarter.

Most sectors reflected the loss, although Exxon and Walmart bucked the trend to hold onto slight gains.

Shares of hardware chain Home Depot fell 1.8 per cent to US$187.74 after the earnings report showed revenues and same-store sales missed estimates.

AFP