news/GOOG/2023.02.21/Wall St tumbles as rising yields pressure growth stocks.txt

(For a Reuters live blog on U.S., UK and European stock
markets, click or type LIVE/ in a news window.)*Home Depot falls as FY profit forecast disappoints*Meta Platforms rises as Facebook tests subscription
service*U.S. business activity rebounds to eight-month high*Indexes down: Dow 1.61%, S&P 1.63%, Nasdaq 2.02%Feb 21 (Reuters) -Wall Street's main stock indexes fell on Tuesday, dragged
down by megacap names, after data showing a rebound in business
activity in February stoked fears that the Federal Reserve might
have more room to raise rates to control inflation.Tesla Inc, Amazon.com Inc, Microsoft
Corp and Google-parent Alphabet Inc fell
between 1.7% and 3.2%, as the yield on the U.S. benchmark
10-year Treasury notes hit a fresh three-month
high. [US?]Higher yields typically weigh on growth stocks, whose
valuations tend to be based on future profits that are
discounted heavily as rates go higher.The S&P Global Purchasing Manufacturer's index showed
that business activity in the U.S. rebounded to its highest
level in eight months in February to 50.2 from 46.8 in January,
buoyed by a robust services sector, according to asurvey."This (business activity) data doesn't do anything to
get rid of the fears that the Fed might be more hawkish and
might feel like taking rates higher than what investors were
thinking just a month ago," said Brian Jacobsen, senior
investment strategist at Allspring Global Investments.U.S. stocks had an upbeat start to the year after their
worst annual showing in more than a decade in 2022, as investors
hoped the central bank's rate-hike cycle was nearing its end.However, recent economic data has pointed to a resilient
economy, with inflation far from the Fed's 2% target, raising
bets for two or three more 25 basis point increases.Money market participants see the Fed fund rates peaking
at 5.35% in July and staying near those levels throughout the
year.At 12:43 p.m. ET, the Dow Jones Industrial Average
was down 543.47 points, or 1.61%, at 33,283.22, the S&P
500 was down 66.45 points, or 1.63%, at 4,012.64, and the
Nasdaq Composite was down 238.52 points, or 2.02%, at
11,548.75.Further weighing on markets,Home Depot Inc slumped 5.8% to a three-month low
after the No. 1 domestic home improvement chain warned of
weakening demand and issued a dour profit forecast for 2023.Smaller rival Lowe's Cos Inc fell 4.9% ahead of its
results next week.Walmart forecast full-year earnings below estimates
and painted a grim picture of hotter-than-expected food
inflation squeezing profit margins. However, the world's largest
retailer added 0.3%.Analysts are expecting earnings of S&P 500 companies to grow
by 1.6% in 2023, compared with 4.4% growth estimated at the
start of the year, as per Refinitiv data.Ten of the major 11 S&P 500 sectors fell, with the consumer
discretionary index slumping 2.7%.Meta Platforms Inc added 0.5% after the Facebook
parent said it was testing a monthly subscription service called
Meta Verified, which will let users verify their accounts using
a government ID and get a blue badge.Declining issues outnumbered advancers for a 6.17-to-1 ratio
on the NYSE and 4.24-to-1 ratio on the Nasdaq.The S&P index recorded one new 52-week high and one new low,
while the Nasdaq recorded 36 new highs and 85 new lows.
(Reporting by Johann M Cherian and Medha Singh in Bengaluru;
Editing by Saumyadeb Chakrabarty, Arun Koyyur and Anil D'Silva)