Wall St sinks as yields spike, financials fall after Goldman miss

Wall St sinks as yields spike, financials fall after Goldman miss

Wall Street's main indexes fell sharply on Tuesday as weak results from Goldman Sachs weighed on financial stocks and tech shares continued their sell-off to start the year as U.S. Treasury yields rose to milestones.

The Nasdaq dropped most among major indexes on Tuesday and now has fallen about 9.7% from its Nov. 19 record closing high, close to confirming a 10% correction for the first time since early 2021. The tech-heavy index also closed below its 200-day moving average, a key technical support level, for the first time since April 2020.

Goldman Sachs shares tumbled 7% after the investment bank missed quarterly profit expectations amid weak trading activity. The financials sector, which has been one of the better-performing groups in 2022, dropped 2.3%.

“The financials crumbling a little bit under the weight of less-than-impressive earnings quarters is probably the biggest factor today,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “When you have taken out potentially one of the areas that actually was working here, that kind of casts a pall on the market."

Benchmark U.S. Treasury yields jumped to two-year highs and two-year yields breached 1% as traders prepared for the Federal Reserve to be