US stocks pared most of their early losses on Tuesday after Treasury prices turned positive. Stocks indexes had earlier fallen to their lowest in about a week, tracking European markets amid a global bond rout. Ten-year US Treasury yields, the benchmark for global borrowing costs, touched their highest since mid-November earlier in the day. Elevated US yields mean higher borrowing costs, which can affect stock markets across the world.
Bonds have been the primary driver in the stocks market in recent days. "You can't have a dramatic move in such a significant part of the capital market without creating ripples elsewhere," said Erik Davidson, chief investment officer at Wells Fargo Private Bank. AOL shares jumped as much as 19.1 percent to $50.75, a 15-month high, after Verizon Communications said it would buy the company in a $4.4 billion deal, or $50 per share. Verizon slipped 0.7 percent to $49.43.
Nine of the 10 major S&P 500 sectors were down, with the materials index leading the declines with a 0.71 percent fall. Dow Chemical Co was the biggest loser on the index with its shares down 1.4 percent. Dupont fell 1 percent. At 12:03 pm ET (1603 GMT) the Dow Jones industrial average was down 43.21 points, or 0.24 percent, at 18,061.96; the S&P 500 was down 6.9 points, or 0.33 percent, at 2,098.43; and the Nasdaq Composite was down 20.10 points, or 0.4 percent, at 4,973.47.
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