US stocks fell, driving the Dow Jones Industrial Average to its first weekly drop in six, on concern rising borrowing costs may slow a rebound in the economy and corporate profits.
McDonald's Corp had the biggest decline on the Dow after the largest restaurant chain said earnings will fall for a sixth quarter. Verizon Communications Inc slid as Moody's Investors Service said the largest local-telephone company should reduce short-term debt, which would increase interest payments.
"The spike we've had in bond yields has undermined people's optimism about the relative attractiveness of stocks," said Bruce Simon, who oversees US$18 billion as chief investment officer at Glenmede Trust Co in Philadelphia.
The Dow fell 52.17, or 0.5 percent, to 10,427.67. The Standard & Poor's 500 Index declined 4.89, or 0.4 percent, to 1,148.70, led by Intel Corp and Microsoft Corp. The NASDAQ Composite Index lost 17.44, or 0.9 percent, to 1,851.39.
For the week, the Dow lost 1.7 percent, trimming its year-to-date gain to 4.1 percent. Its last losing week ended Feb. 8.
The S&P 500 dropped 1.5 percent this week, leaving it little changed this year. The NASDAQ fell 0.9 percent, extending its loss for the year to 5.1 percent.
US Treasuries have fallen four weeks in a row, driving up companies' borrowing costs. The yield on the benchmark 10-year note closed near its highest in nine months on expectations the Federal Reserve will raise rates in May or June as the economy expands.
Four stocks fell for every three that rose on the New York Stock Exchange and the NASDAQ Stock Market. Some 1.2 billion shares traded on the Big Board, 7.8 percent below the three-month daily average.
McDonald's fell US$1.05 to US$27.65. The chain said profit will be less than expected, hurt by a decline in the Euro and fears of ``mad-cow'' disease in Japan.
Verizon slid US$1.42 to US$45.61. The company had about US$12.8 billion of commercial paper at the end of last year and US$8.5 billion of cash or unused bank credit, or two-thirds coverage of its short-term debt, said Moody's analyst Dennis Saputo.
"A prudent financial policy would be to either reduce commercial paper borrowings or increase alternate" ways of raising money, Saputo said in an interview.
Standard & Poor's changed its view of Verizon to "negative," meaning its credit ratings will more likely be cut than raised.
Benjamin Pace, who helps manage US$24 billion at Deutsche Bank Private Banking, said he is avoiding all telecommunications stocks, including local phone companies such as Verizon.
"We are concerned the same kind of competition that reared its head in the long-distance market a few years ago is going to affect" the providers of local service, Pace said.
Moody's has pressured companies including General Electric Co to lower short-term borrowing and boost credit lines after phone company Qwest Communications International Inc lost access to the short-term market because of accounting concerns.
GE gained US$0.42 to US$37.87 after two days of declines on concern it has failed to show how it generates its profit growth.
Qwest, which has fallen as investors scrutinize its accounting for sales of fiber-optic capacity, lost US$0.19 to US$8.50.
Hewlett-Packard Co lost US$0.35 to US$18.15. The company's revenue and earnings from services are "well below plan" for the fiscal second quarter and the planned US$20 billion purchase of Compaq Computer Corp has affected productivity, Dow Jones reported, citing an internal company memo.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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