U.S. Stocks Move Mostly Lower As Treasury Yields See Further Upside

(RTTNews) - Stocks moved mostly lower in early trading on Wednesday, with the major averages all moving to the downside after ending the previous session mixed. With the downward move, the Dow fell to its lowest intraday level in almost a month.

The major averages have climbed well off their worst levels since then but currently remain in the red. The Dow is down 344.35 points or 0.9 percent at 38,508.51, the S&P 500 is down 28.25 points or 0.5 percent at 5,277.79 and the Nasdaq is down 45.36 points or 0.3 percent at 16,974.52.

The weakness on Wall Street comes amid a continued increase by treasury yields, with the yield on the benchmark ten-year note climbing to its highest levels in nearly a month.

The ten-year yield jumped above 4.5 percent on Thursday, as auctions of two-year and five-year notes attracted well below average demand.

The continued advance by treasury yields has added to recent concerns about the outlook for interest rates ahead of key inflation data later in the week.

On Friday, the Commerce Department is due to release its report on personal income and spending in the month of April, which includes readings on inflation said to be preferred by the Federal Reserve.

The inflation data could have a significant impact on the outlook for interest rates ahead of the Fed's next monetary policy meeting on June 11-12.

In an interview with CNBC on Tuesday, Minneapolis Fed President Neel Kashkari said he needs to see "many more months of positive inflation data" before he would consider cutting interest rates.

Kashkari, who does not have a vote on the rate-setting Federal Open Market Committee this year, also said he could not rule out raising interest rates if inflation fails to slow.

Traders may also be cashing in on recent strength in the tech sector, which drove the Nasdaq to a new record closing high on Tuesday amid a surge by shares of Nvidia (NVDA).

Sector News

Airline stocks have shown a substantial move to the downside on the day, resulting in a 2.9 percent nosedive by the NYSE Arca Airline Index. Early in the session, the index hit a six-month intraday low.

America Airlines (AAL) has led the sector lower, plummeting by 14.4 percent after the airline lowered its second quarter earnings guidance.

Significant weakness is also visible among biotechnology stocks, as reflected by the 1.9 percent slump the NYSE Arca Biotechnology Index.

Banking, semiconductor and telecom stocks are also seeing considerable weakness, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.8 percent, while Hong Kong's Hang Seng Index plunged by 1.8 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has tumbled by 1.4 percent, the German DAX Index is down by 1.1 percent and the U.K.'s FTSE 100 Index is down by 0.8 percent.

In the bond market, treasuries are extending the notable downward move seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.2 basis points at 4.594 percent.