US stocks slid on Thursday afternoon, with financial shares hurt by rising bond yields. US Treasury prices fell, and yields rose, after stronger-than-expected job market and service sector data. Rising yields can lead to higher borrowing costs, which can diminish corporate profits.
"Stocks are following bonds and yields are going up," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey. "If the non-farm payrolls are up tomorrow, that may further push bond yields since nervous Nellies react to any hint of inflation."
Bond prices and yields move inversely. The Dow Jones industrial average was down 40.81 points, or 0.30 percent, at 13,536.49. The Standard & Poor's 500 Index was down 3.75 points, or 0.25 percent, at 1,521.12. The Nasdaq Composite Index was up 0.31 point, or 0.01 percent, at 2,645.26.
The benchmark US 10-year treasury note was down 21/32 in price with the yield up to 5.13 percent. Bond prices fell early, following euro zone debt in the morning, and continued to drop after ADP Employer Services reported higher-than-expected US private sector job growth in June.
J.P. Morgan Chase, Goldman Sachs, Bank of America and Wells Fargo declined, with J.P. Morgan Chase down 1 percent at $48.84, Goldman Sachs sliding 1.2 percent to $221.85, Bank of America slipping 0.8 percent at $49.16 and Wells Fargo falling 1.2 percent to $35.25.
Shares of General Motors Corp fell 3.5 percent to $36.67, dragging on the Dow, after announcing weak car and truck sales numbers on Tuesday. On Thursday, Bear Stearns cut its recommendation on the stock of GM, the largest US automaker.
General Electric fell 0.5 percent to $38.51 and AT&T slipped 1 percent to $41.07. Shares of Hilton Hotels Corp rose 26 percent to $45.42 after US private equity firm Blackstone Group on Tuesday agreed to buy the company for about $20 billion plus debt.
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