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US stocks tumble, erasing an early gain; bond yields climb

US stocks tumble, erasing an early gain; bond yields climb
The Associated Press

NEW YORK (AP) — Major U.S. stock indexes have surrendered an early gain and are falling sharply Tuesday as investors sell technology, industrial and retail stocks. Bond yields continue to rise and the 10-year Treasury note reached 3 percent for the first time in more than four years. Alphabet, Google’s parent company, is one of the biggest losers after it reported greater revenue but also an increase in spending.

KEEPING SCORE: The S&P 500 index sank 28 points, or 1.1 percent, to 2,642 as of 1 p.m. Eastern time. It was up as much as 13 points earlier.

The Dow Jones industrial average fell 380 points, or 1.6 percent, to 24,059. The Nasdaq composite dropped 111 points, or 1.6 percent, to 7,018.

Small-company stocks held up better than the rest of the market. The Russell 2000 index declined 7 points, or 0.5 percent, to 1,554.

MISPRINT: Alphabet slid 4.76 percent to $1,024.07 after the company said ad revenue climbed, but expenses also rose. Google’s parent company benefited from strong digital ad sales as well as an accounting change.

Facebook fell 3.5 percent to $160.10 and Microsoft skidded 1.8 percent to $93.65. Another market favorite, Amazon, shed 3.7 percent to $1,461.77.

INDUSTRIAL WEAKNESS: 3M, which makes Post-it notes and industrial coatings and ceramics, shed 8.3 percent to $197.92 after it cut its annual forecast. Defense contractor Lockheed Martin sank 5.9 percent to $337.49 and Boeing lost 2.3 percent to $330.91.

Appliance maker Whirlpool also surpassed expectations and rose 5.5 percent to $158.45 and it helped lead an early rally in the sector. Caterpillar said the strong global economy helped its sales of construction and energy industry machinery and it raised its forecasts for the year. It jumped in early trading but later fell 4.1 percent to $147.70.

BONDS: Bond prices were little changed after an early dip. The yield on the 10-year Treasury note stayed at 2.98 percent, matching Monday’s close. Earlier it peaked at 3 percent for the first time since January 2014. Low interest rates have played an important role in the economic recovery of the last decade by making it cheap for people and companies to borrow money.

The yield on the 10-year note is a benchmark for many kinds of interest rates including mortgages, and it’s been climbing because investors expect greater economic growth and faster inflation.

Since the global financial crisis in 2008-09, a combination of low inflation expectations and a bond-buying program by the Federal Reserve have helped keep bond yields low, but they have climbed this year as inflation has picked up.

SHIRE’S WILD RIDE: Drugmaker Shire rallied again as the company said it is considering a new offer from Japanese rival Takeda. Bloomberg News reported that the companies are close to a deal and the shares rose 2.2 percent to $163.53.

Shire has rallied in the wake of Takeda’s earlier offers, which Shire said weren’t good enough. Shire briefly made big gains last week after Botox maker Allergan said it was considering making its own bid, but the stock dipped again after Allergan decided not to make an offer.

SMALL GOES BIG: American consumers got more confident in the economy in April, according to a survey by the Conference Board. Its consumer confidence index is near 18-year highs. Meanwhile the Commerce Department said sales of new home jumped in March. That helped smaller company stocks, which rose early on and later took smaller losses than their larger peers.

Among smaller banks, Simmons First National rose 4.1 percent to $30.15 and Banner gained 3.9 percent to $58.01. In the technology industry, electronics manufacturer Sanmina-ICU jumped 18.1 percent to $32.70.

CURRENCIES: The dollar rose to 108.85 yen from 108.65 yen. The euro rose to $1.2229 from $1.2205.

ENERGY: Benchmark U.S. crude oil added 1 cent to $68.65 a barrel in New York. Brent crude, used to price international oils, gained 11 cents to $74.82 per barrel in London.

OVERSEAS: Germany’s DAX lost 0.2 percent while the French CAC 40 added 0.1 percent. Britain’s FTSE 100 rose 0.4 percent. Japan’s benchmark Nikkei 225 rose 0.9 percent, helped by the weaker yen. The Kospi in South Korea lost 0.4 percent and Hong Kong’s Hang Seng added 1.4 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at https://apnews.com/search/marley%20jay

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