US Stocks Fall As Treasury Yield Hits Decade Low

Wall Street reversed early gains on Tuesday and slid into the red as investors grew nervous about the economic outlook and bond rates plunged.

The declines sent major indices to their lowest levels in two months and compounded losses for May, which is now likely to be the first down month for Wall Street this year.

In a sign of concern for economic growth, rates on the 10-year US Treasury bond touched 2.261 percent, the lowest level in a decade.

After starting the day higher, the Dow Jones Industrial Average swung more than 350 points to close down more than 0.9 percent at 25,347.77.

Meanwhile, the broader S&P 500 lost 0.8 percent, closing at 2,802.39, and the tech-heavy Nasdaq lost 0.4 percent to settle at 7,607.35. Not since March had either index been so low.

"The stock market is hesitating while the bond market seems to be of a pretty strong view that the world economy is slowing," Karl Haeling of LBBW told AFP.

"Also, from a psychological perspective, the stock market tends to underperform in May so a lot of buyers just want to wait until the end of the month."

An index of US consumer confidence on Tuesday registered an unexpectedly strong jump for May, pointing to sustained retail spending in the second quarter of 2019.

But other segments of the US economy, including business investment and sales of manufactured goods as well as a slowing services sector, have raised concerns of late.

Investors were also absorbing signals on trade negotiations from Washington, Tokyo and Beijing, with the US and Chinese sides showing no signs they were any closer to resolving their dispute.

Duty rates on about $60 billion in US exports to China are due to rise on Saturday in retaliation for President Donald Trump's decision to jack up tariffs on $200 billion in Chinese imports, claiming Beijing had backpedaled on its commitments in trade talks.

Among individual companies, Fiat Chrysler jumped 7.2 percent after offering to merge with France's Renault. A(FP)