Retailers and other consumer businesses fell as mortgage rates hit their highest level since 2009, jeopardizing the pandemic-era housing boom.
The average rate on a 30-year fixed-rate home loan fell to 5.27% from 5.1% a week earlier, housing finance giant Freddie Mac said on Thursday. Rates are expected to rise further, as yields on benchmark Treasuries have rallied.
“Yesterday was all candy and roses, if you will,” said JJ Kinahan, vice president and chief market strategist at online brokerage tastycommerce.
“Today is, ‘we have to raise those rates for a reason, and that reason hasn’t gone away. We still have the inflation problem, and we still have the geopolitical problem…which doesn’t didn’t resolve itself.” said JJ Kinahan.
Online furniture retailer Wayfair slumped after announcing a nearly 14% drop in quarterly revenue and replacing its chief financial officer.
Shares of SeaWorld Entertainment fell sharply after the theme park company reported a lower-than-expected first-quarter loss.
Kellogg was one of the few winners, after the cereal maker posted a 15% rise in profits in the first quarter, saying it was able to pass on price increases to consumers. Kellogg also warned of worsening cost inflation and wartime disruption in Ukraine, but investors are betting consumer staples companies would be best equipped to weather an era of rising inflation. and interest rates.
Similarly, Budweiser owner Anheuser-Busch InBev said rising sales of premium beers drove better-than-expected earnings last quarter and its shares held up better than most.
Write to Rob Curran at [email protected]
(END) Dow Jones Newswire