NEW YORK, Feb 22 Reuters The SP 500 and Nasdaq closed lower on Monday as climbing Treasury yields and prospects of rising inflation triggered valuation concerns, hitting shares of highflying growth companies.
The Dow industrials ended higher, boosted by a surge in Walt Disney Co shares.
U.S. benchmark 10year Treasury yields were up at 1.37 on Monday. Since the beginning of February, 10year yields have risen about 26 basis points, on track for their largest monthly gain in three years.
Still, some analysts noted that the stocks pullback was expected after a torrid rally this year and in 2020.
This is a small pulback primarily because stocks got a little overheated and there are a few worries out there that people are making mountains of out molehills, said Brian Reynolds, chief market strategist, at Reynolds Strategy.
He cited worries about the rise in Treasury yields, but noted that junk bond yields hit alltime lows last week, suggesting there has been a shift from the safety of Treasuries to the riskiness of corporates among investors.
Thats bullish for stocks, he added.
Federal Reserve Chair Jerome Powell is scheduled to speak before the Senate Banking Committee on Tuesday, and investors are expected to look for any potential changes to the central banks dovish outlook.
What investors are grappling with … is what does this higher Treasury yields mean from an inflation perspective. Because of that, theres a little bit of tantrum in the market right now,…