The Dow snapped its longest win streak in almost 40 years on Thursday as stocks pulled back and bond yields rose after U.S. economic growth sped up in the second quarter.
The Dow Jones Industrial Average
DJIA,
fell about 237 points, or 0.7%, ending near 35,282, according to preliminary FactSet data. The S&P 500 index
SPX,
shed 0.6% and the Nasdaq Composite Index
COMP,
closed 0.6% lower. U.S. GDP climbed to a 2.4% annual rate in the second quarter, according to data released Thursday, defying expectations for a recession as the Federal Reserve has jacked up rates to the highest level in 22 years.
“The macro news is extremely strong, with the economy growing 2.4%,” said Peter Cardillo, chief market economist at Spartan Capital Securities, in a phone interview. The jump in 10-year Treasury yield
TMUBMUSD10Y,
to 4% and the strengthening dollar
DXY,
against a basket of rival currencies also took the wind out of the sails of stocks Thursday.
“This could be the beginning of a badly needed pullback,” Cardillo said, adding that he doesn’t anticipate a correction in equities, but a breather, after the Dow rose for 13 straight sessions on Wednesday, its longest streak of wins since 1987, according to Dow Jones Market Data.
On deck, investors will be tuning into an update on inflation for Friday, with a reading of personal spending for June. Stubbornly high inflation is viewed as a key threat in terms of when the Fed can cut rates.
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