US stocks end little changed amid rising treasury yields

The US stocks regained ground on Tuesday while the major averages their worst levels of the day before ending the day little changed. The major averages moved to the downside going into the close, finishing narrowly mixed. While the Nasdaq rose 33.12 points(0.2%) to 18,573.13, the Dow edged down 6.71 points or less than a tenth of a percent to 42,924.89 and the S&P 500 slipped 2.78 points(0.1%) to 5,851.20.

The early weakness on Wall Street partly reflected renewed concerns about the outlook for interest rates following a recent surge by U.S. treasury yields. Treasury yields have moved notably higher in recent days amid worries about the U.S. fiscal deficit and comments from Federal Reserve officials hinting at gradual rate cuts.

Since Fed slashed interest rates by 50 bps in September, CME group's FedWatch Tool is currently indicating an 89.6% chance of just a 25 bps rate cut next month.

The subsequent recovery by the markets came even though the yield on the benchmark ten-year note crept up to a nearly three-month closing high, as traders remain optimistic about the economic outlook.

Verizon dropped steeply contributing to the dip in Dow, the telecom giant tumbled by 5% on the day. The slump by Verizon came after the company reported third quarter earnings that beat analyst estimates but weaker than expected revenues.

Fellow Dow component 3M (MMM) also moved downside despite of the industrial conglomerate reported third quarter earnings that exceeded expectations. General Motors spiked by 9.8% after the auto giant reported better than expected third quarter results.

Housing stocks moved sharply lower, a 3.1% plunge by the Philadelphia Housing Sector Index. The index pulled back further off the record closing high set last Friday.
Computer hardware stocks displayed a substantial weakness, a 2.3% slump by the NYSE Arca Computer Hardware Index. Logitech(LOGI) led the sector lower with computer accessories maker by 8.5% despite reporting better than expected fiscal second quarter results.

Telecom and airline stocks also saw notable weakness on the day, while tobacco and gold stocks showed significant moves to the upside.

Asia Pacific region turned in another mixed performance. Japan's Nikkei 225 Index slumped by 1.4% while China's Shanghai Composite Index climbed by 0.5%.

The major European markets saw modest weakness. French CAC 40 Index closed just below the unchanged line, the U.K.'s FTSE 100 Index edged down by 0.1% and the German DAX Index dipped by 0.2%.

In the bond market, treasuries moved modestly lower post a lack of direction early in the session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, crept up 2.2 bps to 4.20%.

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