Investors seek shelter as U.S. stocks grow more turbulent

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Investors seek shelter as U.S. stocks grow more turbulent

© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri/File Photo

Assets that can help investors weather the storm may be in short supply. Equity sectors such as utilities and consumer staples, popular with nervous investors when markets grow choppy, have been swept up in the S&P 500’s recent decline. Investors have plenty of reasons to be jumpy. Rising bond yields have dampened risk appetite, raising the cost of capital for companies and offering investment competition to stocks. Federal Reserve Chairman Jerome Powell on Thursday said the stronger-than-expected U.S. economy might warrant tighter policy.

"Safe-haven assets have not performed as expected in response to conflicting growth data and elevated geopolitical tensions," analysts at UBS Global Wealth Management wrote on Friday. Some investors are moving to short-term Treasuries or money-market funds, which are providing more attractive returns since interest rates began rising early last year.

 

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Why stock-market investors are fixated on 5% as 10-year Treasury yield nears key thresholdVivien Lou Chen is a Markets Reporter for MarketWatch. You can follow her on Twitter vivienlouchen.
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