Stocks closed mostly higher to kick off October as a sharp selloff in longer-dated U.S. government debt resumed. The Dow Jones Industrial Average DJIA fell about 74 points, or 0.2%, ending near 33,433, according to preliminary FactSet data. The S&P 500 index SPX ended flat at 4,288, while the Nasdaq Composite Index COMP gained 0.7%. Surging long-term borrowing costs remain a key focus in the final quarter of 2023, with the fear being they could derail the U.S. economy and spark more corporate defaults. The benchmark 10-year Treasury yield was punching higher to about 4.682% on Monday. Evidence of the debt rout could be found in the popular iShares 20+Year Treasury Bond ETF, TLT which cemented its lowest close since since August 2007 and in the iShares Core U.S. Aggregate Bond ETF, AGG which finished at its lowest since October 2008, according to Dow Jones Market Data. Investors in short U.S. government T-bills, however, have been mostly insulated from recent volatility, with yields steady in the 5.5% range, according to TradeWeb data.
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