Dow Closes 270 Points Lower as Post-Fed Selloff Continues

The post-Fed hangover endures.

Stocks finished lower and Treasury yields rose Thursday, concluding a second day of weak market action triggered by the Federal Reserve. Read today’s full markets roundup here.

The Fed yesterday held interest rates steady, but officials indicated that they expect to keep them elevated for longer than previously anticipated. All 11 sectors of the S&P 500 finished in the red.

“In this environment, with higher rates for longer, it’s more difficult to achieve a soft landing. You would expect more declines in growth,” said Karim Chedid, an investment strategist at BlackRock.

Meanwhile, in big deal news: Cisco announced plans to acquire cybersecurity firm Splunk for $157 per share in cash, or $28 billion.

U.S. stocks retreated. All three major indexes fell; the Nasdaq Composite was down 1.8%, while the Dow industrials dropped 1.1%, or 370 points. All three major indexes have fallen for three straight days.

Treasury bonds sold off. The benchmark 10-year Treasury yield climbed to 4.479%, marking its highest level since October 2007. Shorter-dated bond yields, which are most sensitive to interest-rate moves, also increased, with the 2-year yield closing at the highest level since July 2006. The 30-year yield also climbed.

Splunk shares rose 21% on news of its deal, while Cisco fell nearly 4%.

U.S. jobless claims were 201,000 for the week ended Sept. 16, below Wall Street expectations of 225,000.

Global indexes fell. Hong Kong’s Hang Seng Index and Japan’s Nikkei 225 both retreated more than 1%. The pan-continental Stoxx Europe 600 also lost around 1%.

The Japanese yen and Swiss franc weakened against the dollar. The greenback hit a 10-month high against the yen on views that the gap between Japanese and U.S. interest rates would widen.