Rising interest rates send stocks tumbling; tech plunges

Rising interest rates send stocks tumbling; tech plunges

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Then came the release of the ISM's non-manufacturing index showing that growth in the USA services sector hit a record high. Higher rates lifted financial firms.

The U.S. Treasury selloff on Wednesday was the biggest story in the financial markets.

"How does the stock market adjust for that?" The Turkish lira and South African.

"A Federal Reserve that is raising rates to prevent the US economy from overheating is constraining the policy options of countries where financial conditions are tightening and trade tensions intensifying".

Bond prices fell. The yield on the 10-year Treasury jumped to 3.12 percent.

"Good news for economy is bad news for equity investors right now", said Michael Geraghty, equity strategist at Cornerstone Capital Group's in NY.

Fed Chair Jerome Powell said on Wednesday that the US central bank had a long way to go before interest rates hit neutral, indicating that more hikes could be on the horizon. "We haven't seen anything like it since the (2016 presidential) election". The ECB this month cut monthly asset purchases in half, while the Fed balance sheet unwind continues.

The benchmark 30-year yield also ticked higher to 3.348 as did shorter duration yields, such as the five-year yield heading higher to 3.048 and the two-year yield rose to 2.88.

It was the bond and currency markets, though, where the attention was really trained.

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Investors are expected to scour the USA government's September payroll report, scheduled for release on Friday, and look closely for signs of wage growth, especially in light of anecdotal indications of rising wages.

The Reserve Bank of India's policy decision is due Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.3 percent, while Japan's Nikkei .N225 dropped 0.5 percent and Australian benchmark .AXJO was up just 0.1 percent.

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Stocks, in turn, have fallen broadly, with the Dow suffering its first decline in six sessions and both the S&P 500 and Nasdaq seeing their worst day since June 25.

Super Micro Computer sank nearly 50 percent after the Bloomberg's report that China implanted tiny chips on motherboards supplied by the company.

The Nasdaq dropped 3.2 percent this week and the Russell tumbled 3.8 percent.

Emerging market stocks lost 0.98 percent, closing at a 17-month low.

Average hourly earnings of private-sector workers rose 2.8 percent to 27.24 dollars in September from a year ago, said the department.

The dollar index .DXY was flat, with the euro EUR= up 0.31 percent to $1.1512.

The dollar slipped to 113.73 yen from 113.86 yen.

A steep sell-off in Treasury bonds that started midweek and pushed 10-year yields to seven-year highs has weighed on stocks and rippled through bond markets globally.

Danske Bank fell 2.3 per cent after it discontinued its share buyback programme and said it was in talks with United States authorities about non-resident accounts at its Estonian branch, which are at the centre of a $235 billion money laundering scandal.

The spread of Italy's 10-year bonds over Germany's decreased one basis point to 2.828 percentage points.

West Texas Intermediate (WTI) crude futures rose 44 cents to $74.77 a barrel by 10:46 a.m. EDT (1446 GMT).

In commodities, Brent crude oil was down 0.2% at $86.15 a barrel and gold was up 0.1% at $1,198.95 a troy ounce.

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-With assistance from Adam Haigh, Tom Freke, Samuel Potter and Sophie Caronello.

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