Wall Street dropped sharply on Tuesday as warnings by bellwether companies of higher costs reverberated as the benchmark USA 10-year Treasury yield pierced the 3$ level for the first time in four years.
The Dow Jones Industrial Average .DJI rose 59.7 points, or 0.25 percent, to 24,083.83, the S&P 500 .SPX gained 4.84 points, or 0.18 percent, to 2,639.4 and the Nasdaq Composite .IXIC dropped 3.62 points, or 0.05 percent, to 7,003.74. The Nasdaq also did not fair well as the index fell by 121 points, 1.7 percent.
The fall in the Nasdaq composite index was 1.7% to 7007.35 points, with shares of Facebook, Amazon, Alphabet and Netflix falling by more than 3.5%.
On Tuesday, bellwether Caterpillar posted earnings and revenue that beat expectations, but the shares fell after the company's CFO said their first-quarter results may have been the "high watermark" for the year.
There were some upbeat quarterly earnings from major companies, but that was dampened by the market's concerns over rising bond yields and borrowing costs.
The initial growth in the markets was thanks to Caterpillar, which reported higher than expected profit and revenues.
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Goodyear Tire & Rubber fell 4.9 percent after warning of higher expenses for raw materials.
Bond prices fell. The yield on the 10-year Treasury rose to 3.02 percent, the highest level since January 2014. Oil prices have also jumped and investors are anxious that new tariffs will also drive up costs and affect company earnings in the months to come.
Gina Martin Adams, chief equity strategist for Bloomberg Intelligence, said it hasn't happened yet. Industrial and basic materials companies and technology firms are taking some of the worst losses. The 10-year Treasury note (http://www.marketwatch.com/story/heres-what-it-means-for-the-market-that-the-us-10-year-yields-3-2018-04-24) yield hit a new high at 3.026%, not seen since December 31, 2013, according to FactSet data.
Wall Street had cheered Caterpillar's results earlier in the day after the company had a strong first quarter and raised its forecasts for the year. Elsewhere, aerospace company Boeing lost 2.9 percent to $329.06.
ENERGY: Benchmark U.S. crude oil shed 1.4 percent to $67.70 a barrel in NY. The yield on the 10-year Treasury note rose to 2.99 percent from 2.98 percent. The stock market had already been spooked by a climb in bond yields earlier in the year, sliding sharply in February. Following a successful test of the round $30 level yesterday, TWTR stock is set to open up 2.6% this morning - though not as much as one volatility trader was hoping for. Gold traded about 0.8% lower to $1,323 an ounce. The Kospi in South Korea lost 0.4 percent and Hong Kong's Hang Seng added 1.4 percent.