# Stocks edge lower as bond yields resume rise

What’s driving the market?

In his remarks Tuesday, Powell said the economy remained far off the Fed’s employment and inflation goals, giving no indication a spike in bond yields would prompt the central bank to begin tapering its asset-buying program. Fears the Fed could move to scale back stimulus sooner than anticipated had been blamed for the stock market’s recent wobble, which hit highflying, tech-oriented and growth shares hardest, while stocks more sensitive to the economic cycle benefited.

Read: Here are 3 reasons why the stock market can survive rising bond yields in 2021

“Powell gave another market-friendly speech, maintaining a highly accommodative stance, almost welcoming the move higher in U.S. bond yields as they ‘reflect more confidence in the economy’ and seemed unperturbed by the frothy conditions in financial markets,” said Chris Weston, head of research at Pepperstone, in a note.

“His views on future asset purchases supported risk, suggesting he wanted to see ‘substantial progress’ before tapering,” Weston said.

Bond yields were on the move again Wednesday morning, reversing early gains in stock futures, after the Food and Drug Administration said that Johnson & Johnson’s single-dose COVID-19 vaccine candidate has no unexpected safety concerns, a step that moves the experimental vaccine one step closer to emergency authorization. Signs of an economy that may run hotter than expected are helping drive yields higher.

Powell will deliver a second day of testimony, this time to a House panel, beginning at 10 a.m. Eastern. Other Fed officials set to make public remarks Wednesday include Gov. Lael Brainard, who will give a guest lecture at Harvard at 10:30 a.m., and Vice Chairman Richard Clarida, who will deliver a speech on the economy to the U.S. Chamber of Commerce at 1 p.m.

Data on January home sales is due at 10 a.m. Eastern.

Which companies are in focus?

• Shares of Square Inc.
  SQ,
  -12.12%
  were down 9.1% in early trade after the company late Tuesday said surging interest in bitcoin and equities trading among Cash App customers helped more than double revenue for its latest quarter. The company also doubled down on its own interest in bitcoin by announcing a new $170 million purchase of the cryptocurrency.

• Intuit Inc.
  INTU,
  -2.09%
  shares were down 3.2% after the financial-services company reported fiscal second-quarter results late Tuesday.

• Shares of aluminum-products maker Arconic Corp.
  ARNC,
  -11.10%
  lost more than 9% after it reported a surprise fourth-quarter loss late Tuesday but delivered revenues that were above forecasts.

• Lowe’s Cos.
  LOW,
  -4.96%
  shares lost 2.6% after the home improvement retailer delivered fiscal fourth-quarter profit and sales that topped expectations, and said it planned to buy back $9 billion worth of its stock this year.

• Shares of Casper Sleep Inc.
  CSPR,
  -7.29%
  fell 1.6% after the mattress company reported fourth-quarter revenue that beat expectations, and a narrower-than-expected losses. 

• Bausch Health Cos. Inc.
  BHC,
  -1.39%
   shares dipped nearly 0.5% after the pharmaceuticals and medical devices company said it reached an agreement with billionaire activist investor Carl Icahn to add two of his nominees to its board of directors.

• Six Flags Entertainment Corp.
  SIX,
  +4.32%
  shares were up 2.5% after the company reported a wider-than-expected loss for the third straight quarter, but saw fourth-quarter revenue fell less than expected as those who did attend the company’s theme parks spent more than forecast.

• Exxon Mobil Corp.
  XOM,
  +2.38%
  on Wednesday said it had agreed to sell most of its non-operated upstream assets in the U.K. central and northern North Sea to HitecVision for more than $1 billion. Shares gained 1.5%.

• Shares of Johnson & Johnson
  JNJ,
  -0.26%
  added 0.8% after the Food and Drug Administration said the company’s single-dose COVID-19 vaccine candidate has no unexpected safety concerns, moving it a step closer to distribution.

How are other markets performing?

• The yield on the 10-year Treasury note
  TMUBMUSD10Y,
  1.416%
   jumped nearly 6 basis points to 1.406% as inflation fears continue to dog markets. Yields and bond prices move in opposite directions.

• The ICE U.S. Dollar Index,
  DXY,
  +0.15%
   a measure of the currency against a basket of six major rivals, ticked up 0.2%.

• Oil futures were higher, with the U.S. benchmark
  CL.1,
  +1.26%
   up 0.4% at $61.93 a barrel, as traders waited for weekly storage data and next week’s OPEC+ meeting. April Brent
  BRNJ21,
  +1.25%
   rose 0.8% to trade near $65.88. April gold futures
  GCJ21,
  -1.14%
   slumped 1% to $1,788.20 an ounce as yields resumed their upward march.

• In overseas stock trading, the pan-European Stoxx 600
  SXXP,
  +0.05%
   was unchanged and London’s FTSE 100
  UKX,
  -0.20%
  lost 0.3%. The Shanghai Composite
  SHCOMP,
  -1.99%
   fell 2%, while Hong Kong’s Hang Seng Index
  HSI,
  -2.99%
  slumped 3%.