NEW YORK: Wall Street stocks edged lower on Monday (Apr 23) as rising US Treasury bond yields revived worries the Federal Reserve will accelerate its pace of interest rate hikes.
US stocks spent much of the morning in positive territory as investors looked ahead to a heavy week of earnings and economic data. But equities struggled to push back into the black after tilting into negative territory at midday.
The Dow Jones Industrial Average slipped 14.25 points (0.06 per cent) to close at 24,448.69.
The broad-based S&P 500 edged up 0.15 points (0.01 per cent) at 2,670.29, while the tech-rich Nasdaq Composite Index dropped 17.52 points (0.25 per cent) to end at 7,128.60.
The yield on the 10-year US Treasury rose closer to 3.0 per cent. Higher yields are a signal interest rates could be on the rise. And higher rates are seen as potentially dangerous to markets because they would make debt payments more expensive, and could steer funds away from stocks and into bonds.
"Every bond trader around the world is watching the US 10-year yield because it has been four years since we saw it at this level," said Tom Cahill, portfolio strategist at Ventura Wealth Management.
"This rise suggests that the Fed could be more aggressive than we could imagine," he said. "It could pressure corporate borrowing costs and consumer prices."
Meanwhile, analysts are gearing up for a deluge of major earnings reports. This week's calendar includes Google-parent Alphabet - which after the close reported quarterly profit soared to US$9.4 billion - as well as Boeing, ExxonMobil and Coca-Cola.
Major economic releases include an estimate of first-quarter US growth and April consumer confidence.
Among notable share moves, Hasbro finished up 4.0 per cent despite reporting a quarterly loss of US$112.5 million following the hit from the Toys "R" Us liquidation. However, the toymaker reaffirmed key targets and expressed optimism it would work past the disruption from the demise of the toy retailer.
In non-earnings news, aluminium manufacturer Alcoa plunged 13.5 per cent after US officials softened sanctions on Russian aluminium giant Rusal, sending aluminum prices sharply lower.