Treasury securities rallied Thursday, as stocks sank on the day after the Federal Reserve cut interest rates. Renewed fears of a credit crunch prompted buying of safe-haven Treasuries.
Two-year Treasury notes posted their second-best gain this year, according to Bloomberg News. Treasuries had lost ground Wednesday, after the Fed hinted it was unlikely to cut interest rates again anytime soon after cuts in September and October.
The yield on the benchmark 10-year Treasury note dropped to 4.35 percent from 4.48 Wednesday. Yields move opposite to prices of debt securities.
A report on inflation that is closely watched by the Federal Reserve was stable in September and an index of business conditions in the nation’s manufacturing sector fell more than expected, giving Treasury securities a lift.
On the New York Stock Exchange, losing stocks outnumbered winners by more than a 6-1 ratio. Trading volume reached 1.74 billion shares, up from 1.54 billion shares Wednesday. Nasdaq losers topped winners by more than a 4-1 ratio, as trading volume reached 2.53 billion shares.
The Standard & Poor’s 500 index dropped 40.94, or 2.6 percent, to 1508.44. It was the third-biggest decline in the last 20 years by the benchmark index on the day after a Federal Reserve monetary policy meeting, according to Bespoke Investment Group.
The Nasdaq composite index lost 64.29, or 2.2 percent, to 2794.83. The Russell 2000 small-company index dropped 32.84, or 4 percent, to 795.18.
Among stocks in the news, shares of popular shoemaker Crocs sank $27.01, or 36 percent, to $47.74, after the company posted disappointing sales and issued a forecast that fell short of analysts’ estimates.
Chicago-based insurance broker Aon gained $1.73, or nearly 4 percent, to $47.05. On Wednesday it posted better-than-expected quarterly results and said it would cut its workforce by 6 percent.
Bond insurance firm Ambac Financial Group sank $7.26, or 20 percent, to $29.57, after Gimme Credit, an independent debt analysis firm, downgraded Ambac’s bonds to “deteriorating.”
Insurer Horace Mann Educators, based in Springfield, dropped $3.72, or 18 percent, to $16.97, reflecting losses in the California wildfires.