Economy

USA stocks close lower amid rising Treasury yield

USA stocks close lower amid rising Treasury yield

In small-caps, the Russell 2000 closed at 1,600.34 with no change.

The broad sell-off followed a slide in bond prices, which sent the 10-year Treasury yield to its highest level in nearly seven years.

The yield on the 10-year Treasury note spiked to a almost seven-year high Tuesday, causing selling in stocks and in particular the ones most sensitive to interest rates.

Home Depot dropped 1.4 percent to $187.98 after the home-improvement retailer reported weaker-than-expected sales, partly because of inclement weather, and said the second quarter got off to a slow start. The S&P 500 lost 19 points, or 0.68%, to 2,711 and the Nasdaq Composite fell 60 points, or 0.81%, to 7,352.

The S&P 500 is up 56.52 points, or 2.1 percent.

The Nasdaq composite dropped 59.69 points, or 0.8 percent, to 7,351.63. A slide in smaller-company stocks offset gains in large companies.

The Canadian dollar hit a near one-week low against its us counterpart as the greenback broadly rose and investors weighed prospects of a deadline being met for a new North American Free Trade Agreement between Canada, the United States and Mexico.

Core April retail sales - which excludes gasoline, automobiles, building materials and food services - rose at a brisker 0.4 percent monthly pace over March, as consumer spending is quickening its pace after a first-quarter slowdown. The agency also revised March sales higher to 0.8 percent from 0.6 percent.

"A combination of firm growth and higher interest rates is unnerving", said Anthony Chan, chief economist for Chase in NY.

With yields rising, rate-sensitive stocks were among the worst performing Tuesday.

"A little bit of today's jitters are related to a hangover to yesterday's wrongly placed exuberance that a trade deal was imminent, and the reality is we are in for a long slugfest between the USA and China", said Jon Mackay, investment strategist at Schroders North America in NY.

The dollar rose to 110.38 yen from 109.66 yen late Monday.

The greenback's gains weighed on precious metals prices. Brent crude, used to price global oil, added shed 8 cents to $78.35 a barrel in London.

The biggest drags on the sector were Kinross Gold Corp., which fell 2.5 per cent, and Barrick Gold Corp., which dropped 1.9 per cent. Copper slipped 4 cents, or 1.2 percent, to $3.06 a pound.

The pan-European FTSEurofirst 300 index rose 0.14 per cent.


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