U.S. stocks drop as bond yields climb

NEW YORK, April 11 (Xinhua) -- U.S. stocks fell noticeably on Monday as investors rotated out of risk assets, in particular, high-flying stocks, amid a momentum in bond yields.

The Dow Jones Industrial Average dropped 413.04 points, or 1.19 percent, to 34,308.08. The S&P 500 fell 75.75 points, or 1.69 percent, to 4,412.53. The Nasdaq Composite Index shed 299.04 points, or 2.18 percent, to 13,411.96.

All the 11 primary S&P 500 sectors ended in red, with energy and technology down 3.11 percent and 2.6 percent, respectively, leading the losses.

U.S.-listed Chinese companies traded mostly lower with seven of the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on a downbeat note.

A rapid rise in bond yields made investors to reassess whether prices have run too high for stocks. The yield on the benchmark U.S. 10-year Treasury bond topped 2.79 percent on Monday, reaching its highest level in three years, while the yield on the 30-year Treasury note also advanced, as investors bet on aggressive policy tightening from the Federal Reserve.

Higher bond yields make future profits less valuable in current terms, a particular headwind for fast-growing tech stocks whose prices reflect expectations for earnings that will flow in years from now, experts noted.

For the week ending Friday, the Dow and the S&P 500 fell 0.3 percent and 1.3 percent, respectively, while the tech-heavy Nasdaq dropped 3.9 percent.