Dow Jones falls almost 425 points; Caterpillar reports earnings plateau

US stocks set to open little changed as 10-year yield approaches 3

US stocks set to open little changed as 10-year yield approaches 3

USA stocks headed lower on Wednesday with technology bearing the brunt of falls soon after opening as investors anxious over rising bond yields, corporate costs and rising trade tensions with China.

The dollar (http://www.marketwatch.com/story/dollar-sets-sights-on-3-month-high-as-10-year-yield-stays-above-3-2018-04-25) was boosted by rising bond yields, with the ICE U.S. Dollar Index up 0.5% at 91.19.

The Nasdaq dropped 121 points to close at 7,007 while the S&P 500 decreased nearly 36 points to 2,635. It was down as much as 619 earlier.

Market favorites including Alphabet and Amazon dropped Tuesday, and heavy equipment maker Caterpillar sank 6.2 percent after warning of weaker profits.

Small-company stocks held up better than the rest of the market.

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The Russell 2000 index slid 8.84 points, or 0.6 percent, to 1,553.28. Google's parent company benefited from strong digital ad sales as well as an accounting change. The Nasdaq gave up 121 points, or 1.7 percent, to 7,007. 3M dropped 6.8 percent.

The Dow is down 695.09 points, or 2.8 percent. The yield on the 10-year Treasury note stayed at 2.98 percent, matching Monday's close.

The yield on the 10-year Treasury reached 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 rise in bond yields early in the day was a signal that the Federal Reserve might have to raise interest rates more rapidly to respond to economic growth and the prospect of more inflation.

New York's financial district.

On the economic front, US consumer confidence rebounded in April, according to the Conference Board, as short-term optimism improved and the share of consumers expecting their incomes to decline in the coming months hit its lowest level since December 2000. Its consumer confidence index is near 18-year highs.

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The Wall Street Journal also reported the U.S. Department of Justice has opened a criminal investigation into Chinese tech company Huawei Technologies Co [HWT.UL] over U.S. sanctions on Iran, potentially adding to tensions with Beijing.

Among smaller banks, Simmons First National rose 4.1 percent to $30.15 and Banner gained 3.9 percent to $58.01.

Diversified industrial manufacturer 3M was the biggest drag on the Dow. The euro rose to $1.2229 from $1.2205. Brent crude, used to price worldwide oils, gained 11 cents to $74.82 per barrel in London.

The S&P 500 index rose 9 points, or 0.4 percent, to 2,680.

The Nasdaq is down 138.77 points, or 1.9 percent.

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