Bonds Knock US Stocks Lower Thursday   08/20 15:28

   The relief that swept the bond market just a day earlier disappeared as oil 
prices, worries about high inflation and the U.S. government's debt kept 
rising. That helped knock the U.S. stock market to its worst loss in three 
weeks on Thursday.

   NEW YORK (AP) -- The relief that swept the bond market just a day earlier 
disappeared as oil prices, worries about high inflation and the U.S. 
government's debt kept rising. That helped knock the U.S. stock market to its 
worst loss in three weeks on Thursday, and Walmart led the way on concerns 
about its upcoming profits. The S&P 500 fell 0.9% for its fourth loss in the 
five days since setting its record last week. The Dow Jones Industrial Average 
dropped 1.3%, and the Nasdaq composite sank 1%. Treasury yields climbed after 
the price of Brent crude rose 2.4% following President Donald Trump's latest 
threat to Iran.

   THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

   NEW YORK (AP) -- The relief that swept the bond market just a day before is 
disappearing on Thursday as oil prices, worries about high inflation and the 
U.S. government's debt keep rising. That helped knock the U.S. stock market 
lower, and Walmart led the way on concerns about its upcoming profits.

   The S&P 500 fell 0.7% and is on track for a fourth loss in the five days 
since setting its all-time high last week. The Dow Jones Industrial Average was 
down 661 points, or 1.2%, with an hour remaining in trading, and the Nasdaq 
composite was 1% lower.

   The bond market remains the center of the action after yields charged higher 
through the summer. Treasury Secretary Scott Bessent made a surprise move 
Wednesday that brought some temporary relief. His department said it will at 
least double the size of its planned purchases of longer-term Treasurys from 
Sept. 9 through Nov. 4.

   That helped push yields down after the 10-year Treasury's yield had hit its 
highest level in more than a year and the 30-year yield got back to where it 
was in 2007, before the Great Recession sent yields toward zero worldwide. It's 
a big deal because high yields slow the economy by raising interest payments 
for people, companies and the government, and they can undercut prices for 
stocks and other investments.

   But analysts had cautioned the effect may be short lived, given how small 
the purchases are relative to the overall size of the Treasury market and how 
they don't fix the fundamental concerns of investors that had driven up yields. 
Plus, more signals arrived quickly to keep those concerns high.

   The U.S. government's debt topped $40 trillion on Wednesday, a staggering 
record that arrived just months after the national debt first blew past the $39 
trillion mark in April, because Washington continues to spend far more money 
than it brings in.

   And on Thursday, the price for a barrel of Brent crude climbed 2.4% to 
$93.78 as uncertainty continues about when the war with Iran will allow oil 
tankers to freely exit the Persian Gulf again. President Donald Trump 
threatened Iran with "the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST 
ANY COUNTRY" late Wednesday but provided few details.

   That helped push the 10-year Treasury yield up to 4.69% from 4.65% late 
Wednesday. It's almost back to its 4.71% level from late Tuesday, before the 
Treasury Department made its announcement.

   A couple encouraging reports on the U.S. economy also helped raise 
longer-term Treasury yields, which move with expectations for the economy and 
inflation in coming years. One said fewer U.S. workers applied for unemployment 
benefits last week than economists expected, while another said manufacturing 
in the mid-Atlantic region appears to be much stronger than expected.

   On Wall Street, Walmart was the heaviest weight on the S&P 500 and fell 9.6% 
even though it reported stronger profit and revenue for the latest quarter than 
analysts expected. Investors focused instead on how an important underlying 
measure of revenue growth at its stores slowed again. Its forecast for profit 
in the current quarter also fell short of analysts' expectations.

   Given its massive size, Walmart offers a look at how shoppers are doing 
across the United States. A surprisingly weak update on sales at U.S. retailers 
overall last month had raised worries that shoppers may be succumbing to 
pressure from high inflation and a job market that may be looking less solid.

   Advance Auto Parts tumbled 26.7% toward its worst loss in three years after 
the retailer reported weaker revenue for the latest quarter, even though its 
profit topped expectations. CEO Shane O'Kelly said that "tighter household 
budgets constrained spending more than we anticipated, especially during the 
last four weeks of the quarter."

   Spending by U.S. consumers is the main engine of the economy, and a pullback 
by them could exacerbate what's already a slowdown in growth for the economy.

   A pullback could also mean a double-whammy for travel companies, which would 
see fewer bookings when they have to pay higher prices for fuel. Norwegian 
Cruise Line Holdings fell 5.3%, while United Airlines sank 4.1% and American 
Airlines lost 2.7%.

   Helping to keep Wall Street's losses in check was Deere, which reported 
stronger profit and revenue for the latest quarter than analysts expected. It 
rose 6.8% as the company said order trends indicate the agriculture equipment 
business looks set to accelerate after this year.

   In stock markets abroad, indexes were mixed in Europe following a stronger 
finish in Asia.

   South Korea's Kospi soared 5.9% for one of the world's biggest moves after 
the two tech titans that dominate its market, Samsung Electronics and SK Hynix, 
jumped. Such swings have become more common for Seoul's market, which has borne 
the brunt of rising and falling worries that winning stocks in the 
artificial-intelligence boom may have shot too high.