Investors Shift Out Of High-Dividend Stocks

Benchmark Treasury yields overnight hit 2.235 percent - the highest in more than a year - and have risen since last week when Federal Reserve Chairman Ben Bernanke raised fears that the Fed would curb its bond-buying program sooner than most people expected. Indexes made up of consumer staples, health care, telecommunications and utilities shares - S&P 500 sectors that include many stocks that pay high dividends - all slid more than 1 percent. Johnson & Johnson (JNJ.N), down 2.2 percent at $85.65, was the biggest drag on the S&P 500.

"The recent rise in interest rates on the 10-year bond over the past few sessions has finally caught up with some of this year's market leaders," said Michael Sheldon, chief market strategist for RDM Financial in Westport, Connecticut, adding that investors were cashing in profits. The defensive sectors have led the gains in this year's market rally as investors favored high-dividend stocks over fixed-income securities in a low interest-rate environment.

Source: Reuters

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