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Wall St. slides on inflation fears, trade jitters


By Stephen Culp

(Reuters) - A surge in bond yields to their highest level in almost 7 years sent Wall Street shares sliding on Tuesday after strong data stoked inflation concerns and investors fretted about looming trade talks between the and

All three U.S. stock indexes were down nearly 1percent, on track to post their worst daily declines in three weeks.

Investors remain preoccupied by the run-up to high-level talks between and the set to commence this week in U.S. to said the two countries remain "very far apart" regarding a tariff resolution, after which told he supports efforts to reach an agreement.

"In general terms, we have a trade skirmish not a trade war," said Anthony Chan, JP Morgan in "Longer term, we believe these trade issues will be resolved but on a day-to-day basis they lead to some consternation from investors."

U.S. increased at a moderate 0.3 percent in April as rising gasoline prices took a bite out of discretionary spending, according to the

But core - which exclude gasoline, automobiles, building materials and - rose at a brisker 0.4 monthly pace over March, suggesting consumer spending is accelerating after its first quarter slowdown.

The yield on 10-year notes rose to its highest level since July 2011 on the news, raising expectations for further rate hikes from the Federal Reserve.

"It really tells you that there's no justification at all for the Federal Reserve to slow down the growth pace, which tells you that maybe this hiking thing and long term yields is real," Chan said.

At 2:28 p.m. ET, the Dow Jones Industrial Average <.DJI> fell 215.3 points, or 0.86 percent, to 24,684.11, the <.SPX> lost 22.13 points, or 0.81 percent, to 2,708 and the Composite <.IXIC> dropped 73.69 points, or 0.99 percent, to 7,337.62.

The losses were broad based, with all 11 S&P sectors in negative territory.

shares slipped 1.3 percent after the home missed sales forecasts as the long winter put a damper on demand for spring products.

Smaller rival was down 0.9 percent.

Declining issues outnumbered advancing ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 1.25-to-1 ratio favored decliners.

(Reporting by Stephen Culp; Editing by Nick Zieminski)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 16 2018. 00:50 IST