Wall St slides as Treasury yields stay high, Middle East worries mount

NEW YORK, Oct 20 (Reuters) – Major U.S. stock indexes fell Friday afternoon, with technology and financial shares among the biggest drags, as investors worried about higher interest rates and the Middle East conflict.

The S&P 500 technology (.SPLRCT) and financial sectors (.SPSY) dropped more than 1% in broad-based selling. Among the index’s 11 sectors, only real estate (.SPLRCR) was higher.

The KBW regional banking index (.KRX) was down nearly 3%, while shares of Regions Financial (RF.N) slid to their lowest since March 2020.

“That whole sector is under a cloud, with higher rates,” said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm in Toledo, Ohio. “We might not have that soft landing and that’s going to hurt.”

The benchmark 10-year Treasury yield fell on Friday, a day after crossing 5% for the first time since July 2007 in the wake of comments by Federal Reserve Chair Jerome Powell. He said the U.S. economy’s strength and tight labor markets could require tougher borrowing conditions to control inflation.

The Dow Jones Industrial Average (.DJI) fell 213.52 points, or 0.64%, to 33,200.65, the S&P 500 (.SPX) lost 42.67 points, or 1.00%, at 4,235.33 and the Nasdaq Composite (.IXIC) dropped 170.24 points, or 1.29%, to 13,015.93.

Investors will also likely keep a close eye on Middle East events over the weekend, Lancz said.

“I would think investors are going to be cautious and taking money off the table,” ahead of the weekend, he said.

Israel leveled a northern Gaza district on Friday.

SolarEdge (SEDG.O) shares slumped after it warned of significantly lower revenue in the fourth quarter.

Declining issues outnumbered advancers on the NYSE by a 2.03-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.

The S&P 500 posted no new 52-week highs and 36 new lows; the Nasdaq Composite recorded three new highs and 364 new lows.

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