U.S. stocks fell firmly on Tuesday after a surge in United States government bond yields to their highest level in nearly seven years challenged appetite for equities compared with climbing rates for risk-free bonds.
Higher borrowing costs sent stocks sharply lower. The blue-chip Dow Jones grew by 68.24 points, with UnitedHealth and Walmart being the best-performing stocks in the index. That's the highest level since July 2011 for the yield, which is used to set interest rates on mortgages and other kinds of loans.
Business inventories were unchanged for the month of March following a previous increase of 0.6%.
Share prices fell Wednesday in Asia after losses in technology and health care companies snapped an eight-day winning streak for the Dow Jones industrial average. Capital One Financial stock rose 1.6 percent.
"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. Bond yields tend to rise when investors expect faster economic growth and higher inflation. Drugmaker Celgene slid 3.9 percent to $81.98.More news: Newcastle United smash listless Chelsea, finish 10th
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The greenback's gains weighed on precious metals prices. Gold fell below $1,300 an ounce for the first time this year.
USA light crude closed 35 cents, or 0.5 per cent, higher at $71.31 a barrel, also not far off the day's peak at $71.92, its highest since November 2014. Brent crude, used to price worldwide oil, added shed 8 cents to $78.35 a barrel in London. Silver dropped 38 cents, or 2.3 percent, to $16.27 an ounce.
In other energy futures trading, heating oil was little changed at $2.25 a gallon. NXP's share price rose by 11.9% and Qualcomm added 2.7% to its value. Natural gas dipped a penny to $2.84 per 1,000 cubic feet. Germany's DAX fell 0.1 percent after new data showed the country's economy slowed in the first quarter. Britain's FTSE 100 added 0.2 percent.
The North Korean government reportedly threatened to cancel high-stakes talks with the Trump administration because of joint US-South Korean military drills.
The pan-European FTSEurofirst 300 index rose 0.14 per cent. Hong Kong's Hang Seng fell 0.8%.