Dow Jones industrials cross 27,000 points for first time

Associated Press

An early rally on Wall Street that sent the Dow Jones Industrial Average above 27,000 for the first time lost much of its momentum this afternoon.

The S&P 500 edged lower, erasing the gains that had briefly propelled the benchmark index above 3,000 for the second day in a row. The Nasdaq composite also turned red, pulling below its record closing high from a day earlier.

Bond yields surged, making traditionally high-yielding sectors such as utilities and real estate stocks less attractive. The yield on the 10-year Treasury note climbed to 2.13 percent from 2.06 percent late Wednesday.

The spike in bond yields helped drive bank stocks higher. When bond yields rise, they push up interest rates on mortgages and other loans, making them more profitable for lenders. Bank of America rose 1.5 percent and Goldman Sachs gained 2.5 percent.

Health care stocks took some of the heaviest losses, even though several big health insurers and pharmaceutical companies surged after the White House withdrew a drug rebate plan that had aimed to reduce the cost of medications for people on Medicare by shifting rebates from insurers and distributors to patients.

The market started the day riding a two-day winning streak. It had been trending higher as investors grew more confident that the Federal Reserve may cut interest rates for the first time in a decade as soon as the end of this month.

On Wednesday, Fed Chairman Jerome Powell said that many Fed officials believe a weakening global economy and rising trade tensions have strengthened the case for a rate cut. The remarks came as Powell gave testimony before the House Financial Services Committee.