Tech and health care drop stocks lower; bond yields rise

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The S&P 600 closed at 982.43 for a gain of 0.30 points or 0.03%.

USA stocks dropped sharply on Tuesday after Home Depot reported quarterly sales that fell short of Wall Street's expectations and interest rates breached new highs. USA shares were set to drift slightly lower, with Dow futures down 0.4 percent and S&P 500 futures 0.3 percent lower.

Losses at technology and health care companies helped pull stocks lower Tuesday, snapping the Dow Jones industrial average's eight-day winning streak.

Among the technology stocks pressuring the overall market, Alphabet Inc., the parent company of Google, fell 2%, while Facebook Inc. lost 1.2%.

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.

Higher borrowing costs sent stocks sharply lower.

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The benchmark 10-year note's yield climbed to 3.09% in afternoon trading, and it is up more than 67.1 basis points in 2018, according to data from bond platform Tradeweb. 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 agency also revised March sales higher to 0.8 percent from 0.6 percent. At 3.08% earlier today, it was the highest yield since July 2011. "The most notable of these is the retail sales data for April, which is expected to be relatively good for a second consecutive month following a few poor numbers that were a little worrying", Craig Erlam, a senior market analyst for Oanda, said in a commentary.

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

Among the S&P industry groups, the rate-sensitive real estate space ended at the bottom of the standings with a 1.7% loss, including a 3.8% rout in the iShares U.S. Home Construction ETF.

Declining issues outnumbered advancing ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored decliners. Mortgage rates, which have been rising this year, tend to track the movement in the 10-year Treasury yield. Brent crude, used to price global oil, gained 77 cents to $79.00 a barrel in London.

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

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