DOW DROPS 700 POINTS IN ITS WORST DAY SINCE JULY 29

🔴 The Dow closed down 700 points Thursday, its worst day since July 29.

CNBC reports the sell-off came as long-dated US Treasury yields resumed climbing, after government efforts to stem the recent bond market rout failed to ease investor fears about inflation.

The S&P 500 fell 0.9%. The Nasdaq Composite fell 1%.

The damage for the week is bigger. The S&P 500 is down 1.9% week to date and the Nasdaq is off 2.5%, both on pace to snap a three-week winning streak. The Dow is down 1.8% and tracking back-to-back weekly losses.

Why the bond fix did not work: UBS Americas CIO Ulrike Hoffmann-Burchardi wrote that unlike Fed quantitative easing, the Treasury cannot create money to fund asset purchases. Any buybacks have to be financed elsewhere, most likely through increased bill issuance.

Her conclusion is the part the market read. The operation reshapes the maturity profile of debt held by investors rather than reducing the amount of debt markets must absorb. It neither removes the financing need nor resolves concerns about Treasury supply.

Futures barely moved overnight. Dow futures rose about 25 points, S&P 500 and Nasdaq-100 futures near flat.

📈 One green name: Ross Stores rose more than 7% after hours on adjusted earnings of $2.06 per share and revenue of $6.26 billion, against FactSet estimates of $1.95 and $6.16 billion. The discount retailer also raised full-year guidance.

Asia-Pacific markets were set to open broadly lower.

Are you buying this dip, or waiting to see where yields settle?

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