Since early 2009, the S&P 500 has quadrupled, driven higher by the US economic expansion, hefty profits for corporations and historically low interest rates, all of which makes stocks an attractive investment.
USA long-dated Treasury yields rose again in extension of a trend during the past few weeks fuelled by solid U.S. economic data that reinforced expectations of multiple interest rate hikes in the next 12 months.
Some of the big losers were stocks that have scored double-digits gains earlier in 2018. Apple (AAPL) has declined 1.4% to $223.73, Facebook (FB) has fallen 1.8% to $155.09, Netflix (NFLX) has slumped 5.7% to $335.33, Amazon.com (AMZN) has dropped 3.2% to $1,810.09, and Alphabet (GOOGL) is off 2.1% at $1,120.08.
Tokyo stocks dropped almost 2% on opening, with Hong Kong stocks were also braced for losses.
Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in USA interest rates. That didn't happen Wednesday as stocks fell further late in the day.
"It's a risk-off environment as investors are focusing on spiking yields and taking profits off the table as they are concerned about whether the bull market is actually coming to an end", said Ryan Nauman, market strategist at Informa Financial Intelligence. And those trends, in turn, tend to prompt many investors to sell stocks perceived as more risky-even when the trends are themselves by-products of good economic news and strong market performance. Higher rates can also slow economic growth, making it more expensive for businesses to borrow and for consumers to spend. The S&P 500 Utilities index is up 0.4%, a sign that investors are just plain scared.
Sears nosedived after the Wall Street Journal reported that the struggling retailer hired an advisory firm to prepare a bankruptcy filing that could come within days. It was more than $40 five years ago.
Boeing shed 3.3 per cent to US$372.58 and 3M fell 2.2 per cent to US$205.77.
Sears has closed hundreds of stores and sold several famous brands or put them on the block as it sees more customers abandon its stores. Brent crude, the global standard, lost 65 cents to $84.35. The current benchmark interest rate is 2 to 2.25 percent. Natural gas rose 0.6 percent to $3.28 per 1,000 cubic feet.
CVS dipped 0.1 percent to $79.40 and Aetna added 0.5 percent to $204.64.
S&P 500 e-mini futures EScv1 and Nasdaq futures NQcv1 were both down 0.1 percent. Copper fell 0.9 per cent to $2.78 a pound.
It followed a bleak session in Europe, where Germany's Dax and France's Cac 40 had each ended the day more than 2% lower. Investors see many of these countries as being vulnerable to higher USA interest rates, which can pull away investment dollars. Brazil's Bovespa lost 2.5 percent and the Merval in Argentina sank 2.2 percent.
The dollar fell to 112.59 Japanese yen from 113.05 yen late Tuesday.
The euro and sterling rose, underpinned by optimism for a Brexit deal, while the US dollar lost ground against a basket of currencies even as USA yields hovered near multiyear peaks.