Dividend Stocks Finally Stumble

Sectors boasting hefty cash payouts performed strongly in the first quarter, as investors rushed into assets offering steady cash flow. Federal Reserve stimulus had kept interest rates -- and bond yields -- low, leaving investors hungry for income. The quarter's three top sectors were health care, consumer staples, and utilities.

Amid widespread speculation about when the central bank would pull back its bond-buying, the yield on the 10-year Treasury bond rose above 2.1% for the first time in more than a year. And as Treasuries sold off, high-yielding stocks did the same. They lagged behind the broad stock-market benchmarks -- an unusual development for the group, which had seemed to defy gravity at points in this year's rally.

Source: Baron's

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