Stocks tumble as Treasury yields rise
The major U.S. indices are lower on news of higher yields on U.S. government bonds. At 11:50 a.m. ET the Russell 2000 was down 8.89 points, or 1.06%, to 832.32. The Dow Jones Industrial Average was down 69.81 points, or 0.52%, to 13,395.86.
Shares of PriceSmart, Inc. (Nasdaq: PSMT), which operates U.S.-style membership shopping warehouse clubs in Central America and the Caribbean, are higher on news May store sales increased. Same-warehouse sales (sales at warehouses open more than one year) rose 21.3% for the five weeks ended June 3, compared with the same period of 2006, the San Diego-based company said before the opening bell. May net sales were $72.5 million, a 21.7% increase compared with sales of $59.5 million a year ago. Shares have climbed $1.72, or 8%, to $21.99.
Hooker Furniture Corp. (Nasdaq: HOFT) reported a decline in quarterly profit and missed Wall Street’s projections. The net income for the quarter ended April 29 was $4.3 million, a decline of 26.5%, compared with a net income of $5.8 million in 2006, the Martinsville, Va.-based company stated after Wednesday’s close. Two analysts polled by Thomson Financial were looking for earnings of $0.35 per share. Quarterly sales fell to $77.3 million, a decline of 14.8%, compared with the same three months of 2006. Wall Street was expecting sales of $79.7 million. The stock is down $2.62, or 11%, to $21.30.
Shares of NeurogesX, Inc. (Nasdaq: NGSX) are up $0.35, or 5%, to $7.85, on news the San Carlos, Calif.-based company will present data showing that its dermal patch significant reduces neuropathic pain. Results from a Phase III trial will be publicized at the International Congress on Neuropathic Pain in Berlin, Germany on June 8, NeurogesX announced before the opening bell.
The yield on the 10-year U.S. Treasury rose to 5.08%, while the 2-year note climbed to 5.01%.
Economists believe that strong global growth will lead to central banks to raise interest rates. Today New Zealand raised its interest rates, while the European Central Bank raised rates to 4% on Wednesday.
In business news, same-store sales at U.S. retailers improved in May, following a sharp contraction in April, when cold weather and an early Easter holiday kept shoppers away.
Elsewhere, jobless claims fell 1,000 to a seasonally adjusted rate of 309,000, the Labor Department reported before the market open. The numbers suggest that slow U.S. economic growth is not largely impacting the jobs market.
