Stocks wilt, bond yields jump as investors focus on rates
Updated prices at 11:37 a.m. ET/ 1537 GMT
By Sinéad Carew and Harry Robertson
NEW YORK/LONDON, May 29 (Reuters) -A global equities gauge fell on Wednesday while benchmark U.S. Treasury yields rose as investors worried about interest rates a day after a weak bond auction and waited for a key U.S. inflation report due on Friday.
The dollar held firm, rising against the Japanese yen as placid markets encouraged investors to resume carry trades.
MSCI's gauge of stocks across the globe .MIWD00000PUS fell 7.54 points, or 0.95%, to 784.91, putting it on track for its biggest daily decline since April 30.
"It's the aftermath of the bond auction Tuesday. Auction anxiety has set in," said Brian Jacobsen, chief economist at Annex Wealth Management. "To the extent it means interest rates are going to rise that can be worrying when consumers are already showing some signs of spending fatigue."
As of 11:37 a.m. ET, the Dow Jones Industrial Average .DJI fell 320.84 points, or 0.83%, to 38,532.02, the S&P 500 .SPX slid 30.52 points, or 0.58%, to 5,275.44 and the Nasdaq Composite .IXIC lost 65.09 points, or 0.38%, at 16,954.79.
Europe's STOXX 600 .STOXX index fell 1.06%.
The U.S. 10-year Treasury yield hit a four-week high and was last up 7 basis points at 4.612%, from 4.542% late on Tuesday.
The 30-year bond US30YT=RR yield rose 7.8 basis points to 4.7338% from 4.656% while the 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations, rose 2.6 basis points to 4.983% from 4.957% late on Tuesday.
The dollar index =USD, which measures the greenback against a basket of currencies including the yen and euro, gained 0.35% at 105.03, with the euro EUR= down 0.41% at $1.081.
The dollar strengthened 0.26% to 157.57 yen JPY=, the highest since May 1.
Oil prices turned lower after grazing a four-week high on expectations major producers will extend output cuts at a Sunday meeting and that fuel consumption will start rising as the peak summer demand season kicks off.
U.S. crude CLc1 lost 0.63% to $79.33 a barrel and Brent LCOc1 fell 0.68% to $83.65 per barrel.
Spot gold XAU= fell 0.97% to $2,338.15 an ounce as a stronger dollar, higher bond yields and hawkish comments from a Fed official on Tuesday still weighed on sentiment.
World FX rates YTD http://tmsnrt.rs/2egbfVh
Global asset performance http://tmsnrt.rs/2yaDPgn
Asian stock markets https://tmsnrt.rs/2zpUAr4
Bond yields are climbing again as rate cuts get pushed back https://reut.rs/3yEpCfY
Reporting by Sinéad Carew in New York, Harry Robertson in London; additional reporting by Kevin Buckland in Tokyo; Editing by Sam Holmes, Ros Russell, Chizu Nomiyama and Richard Chang
To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA
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