The Dow Jones Industrial Average was down yesterday, but it's certainly not out.
S&P 500 futures have fallen 0.1%, while Dow Jones Industrial Average futures have dropped 27 points, or 0.1%. Nasdaq Composite futures have declined 0.1%.
The story remains U.S. Treasury yields, even if they're not doing much today. The 10-year yield skyrocketed to its highest level since 2011 yesterday, as retail sales suggested that the economy continued to cruise along. Today, they've ticked down a bit--they're trading at 3.06% at the time of writing--but how high they can go remains the focus today.
The dollar may be just as important. It's also been surging, and that could have an impact on global growth. "If a continued sharp rise in interest rates is accompanied by a stronger dollar, then we could reach the point of a U.S. and global slowdown much sooner," writes strategists at Pavilion Global Markets. "Meanwhile, rising interest rates at the longer end of the curve would put a strain on U.S. household borrowing costs and also increase discount rates for equities."
So when do they really start to hurt? The Sevens Report's Tom Essaye contends that the 10-year would have to trade through 3.25% during the next few weeks--and be accompanied by a U.S. Dollar Index at 95--to have a real impact. "And, even then, it wouldn't so much be the absolute level that would be the problem, it would be the pace of the rise, as moves like that would cause investors to begin extrapolating out when the dollar would hit par, and the 10-year yield 4% (and both those absolute levels would be a problem for corporate earnings)," Essaye writes.
And a problem for the market long before then.
3M (MMM) is down 1.1% to $200.29 after Jefferies downgraded it to Hold.
Abaxis (ABAX) is up 15% to $82.50 on news that Zoetis (ZTS), down 0.4% to $82.71, will acquire the veterinary medicine company for $83 a share in cash.
Advanced Micro Devices (AMD) is up 1.6% to $12.65 after Susquehanna upgraded it to Neutral.
CenturyLink (CTL) is down 1% to $17.19 after Macquarie downgraded it to Underperform.
GameStop (GME) is up 1.8% to $13.75 on news that Tiger Management issued a letter urging the company to launch a strategic review.
Macy's (M) is up 9.1% to $32.65 after reporting first-quarter earnings. The department store earned 48 cents a share on revenue of $5.54 billion. Analysts were looking for earnings of 35 cents on revenue of $5.39 billion. For the full year, Macy's raised its guidance, as it now expects to earn between $3.75 and $3.95 a share, on revenue of $24.59 billion to $24.96 billion. The consensus calls for earnings of $3.60 a share on revenue of $24.62 billion.
Symantec (SYMC) is down 1.7% to $21.96 after Goldman Sachs downgraded it to Neutral.
Teva Pharmaceuticals (TEVA) is up 3.8% to $21.07 on news that Warren Buffett increased his stake in the drug maker.
WisdomTree Investments (WETF) has fallen 2.5% to $11.25 after getting cut to Hold from Buy at Deutsche Bank.
Sign up to Review & Preview, a new daily email from Barron's. Every evening we'll review the news that moved markets during the day and look ahead to what it means for your portfolio in the morning.