Stocks soften as yields rise
The Russell 2000 is flat and the Dow has fallen on news that U.S. bond yields have increased after an optimistic economic report. At 11:34 a.m. ET the Russell 2000 was down 0.21 points, or 0.02%, to 847.99. The Dow Jones Industrial Average had lost 26.18 points, or 0.19%, to 13,551.12.
Shares of Rio Vista Energy Partners L.P. (Nasdaq: RVEP) are higher following news the operator of a liquefied petroleum gas terminal facility in Mexico will acquire all the assets of oil and gas explorer Northport Production Co. for $18 million. Rio Vista will issue 900,000 restricted units of the master limited partnership and a $9 million note, both payable to Northport, in order to finance the deal, the Houston-based company said this morning. Northport operates 100 wells in the United States. The acquisition has not yet been approved by the companies’ boards. Shares of Rio Vista are up $0.72, or 6%, to $12.66.
Duluth, Ga.-based trucking company Saia Inc. (Nasdaq: SAIA) fell after an analyst reduced his target price for the company. Financial services giant Credit Suisse Group (NYSE: CS) reiterated its “neutral” rating but reduced the target price to $33 from $34, according to a research note before the start of trading. Shares are down $1.11, or 4%, to $26.45.
Energy facilities operator U.S. Energy Systems, Inc. (Nasdaq: USEY) announced before the opening bell that it has appointed Richard Nevins as its interim CEO. On Monday, July 2, the New York-based company fired Asher E. Fogel following an announcement on June 25 that potential defaults could result in bankruptcy. There is no news how long Nevins, who has more than 30 years of experience, will serve as interim CEO and when U.S. Energy Systems plans on hiring a permanent executive. Shares are up $0.02, or 1%, to $1.69.
In economic news, U.S. jobless claims for the week ended June 30 increased 2,000 to 318,000 on a seasonally adjusted, the Labor Department said before the opening bell. That met economists’ expectations.
Meanwhile, in June the U.S. services industry outpaced projections to record its fastest growth in 14 years. The Institute for Supply Management’s index of non- manufacturing businesses moved up to 60.7, from 59.7 in May, the group said after the start of trading.
Readings above 50 indicate growth. Observers were expecting the index to fall to 58.
The rising index suggests the U.S. economy has picked up speed.
However, the major U.S. indices turned south as the upbeat economic data drove the yield on the 10-year Treasury note up to 5.123%, the highest level since June 28.
Rising yields can lead to higher interest rates.
