Dow jumps to another record | 10-year yield hits 1-year high | Housing boom to continue?

FRI, MAR 12, 2021

EVENING BRIEF

AS OF FRI, MAR 12, 2021 • 04:36 ET

DJIA		32778.64
		+0.90%	+293.05

S&P 500		3943.34
		+0.10%	+4.00

NASDAQ		13319.87
		-0.59%	-78.81

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	121.03	-0.93	-0.76%
BA	269.19	+17.19	+6.82%
MSFT	235.75	-1.38	-0.58%

S&P 500
NAME	LAST	CHG	%CHG
GE	12.58	+0.31	+2.53%
AAPL	121.03	-0.93	-0.76%
F	13.37	+0.56	+4.37%

NASDAQ
NAME	LAST	CHG	%CHG
AAPL	121.03	-0.93	-0.76%
TSLA	693.73	-5.87	-0.84%
AMD	81.05	-0.18	-0.22%

EDITOR'S NOTE

Stocks ended the week divided, as a new one-year high for the 10-year Treasury yield on Friday spooked investors in tech companies. The S&P closed up just 0.10% on Friday, while the Nasdaq was down 0.6%. The Dow Jones Industrial Average gained about 290 points.

The action capped a busy week in which the Dow and the S&P 500 cracked new records, buoyed by reopening optimism and President Joe Biden's enactment of the $1.9 trillion Covid relief bill.

Whether it was the spring weather, the impending wave of stimulus cash or Biden's call to expand vaccine eligibility, interest rates leapt to new heights today. The 10-year Treasury yield popped as high as 1.642% on Friday – its highest level since Feb. 7, 2020.

Major tech names recoiled, as shares of Facebook slid 2%, and Alphabet fell 2.4%. Meanwhile, cyclical stocks enjoyed a bounce. Boeing jumped 6.8% and was up by more than 20% for the week, while Caterpillar popped 4.2%. Southwest Airlines also climbed nearly 4.4%. Another group that's grabbing a tailwind from higher interest rates are midcap banks.

The SPDR S&P Regional Banking ETF was up more than 5% for the week. The banks benefit from a steepening yield curve – that is, the difference in rates between various bond maturities. Indeed, the yield curve between the 2-year Treasury and the 10-year ticked to a high of 1.486% Friday. Analysts have taken notice.

"Given our base case view that yields continue to move higher from here, our analysis would suggest that banks still have further room to run," said Ken A. Zerbe, equity analyst at Morgan Stanley.