Tuesday's early trade: Wall Street slips

Wall Street slipped on Tuesday after retail sales data pointed to a steady rise in inflation, reviving fears of faster interest rate hikes, while a lack of progress in US-China trade talks continued to weigh on the market. After the data, which supports economists' expectations that the Federal Reserve will raise interest rates next month, the yield on the benchmark US 10-year Treasury note surged to a seven-year high of 3.0740 percent.
US retail sales rose moderately in April as rising gasoline prices cut into discretionary spending, but the gain in core retails sales was stronger, indicating consumer spending was on track to accelerate after slowing sharply in the first quarter.
"You had good retail sales number this morning which was further confirmation that first-quarter economic facts were overstated and that economic momentum in the second quarter remains strong," said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co in Milwaukee, Wisconsin.
The United States and China are still "very far apart" on resolving trade frictions, US Ambassador to China Terry Branstad said, as a second round of high-level talks were set to begin in Washington.
But White House economic adviser Larry Kudlow said the United States is seeking to make a trade deal.
At 13:10 p.m. EDT the Dow Jones Industrial Average was down 211.67 points, or 0.85 percent, at 24,687.74, the S&P 500 was down 21.83 points, or 0.80 percent, at 2,708.30 and the Nasdaq Composite was down 71.30 points, or 0.96 percent, at 7,340.02.
The losses were broad based, with ten of the 11 major S&P sectors in the red. Only the S&P financial sector was higher, by a marginal 0.02 percent, helped by higher yields.
The KBW bank index was up a stronger 0.55 percent.
While consumer stocks overall were lower, shares of retailers including J. C. Penney, Target and Macy's rose between 1.6 percent to 3.9 percent. Home Depot slipped 1.4 percent after the No.1 US home improvement chain missed Wall Street forecasts for sales at established stores. Smaller rival Lowe's was down 0.7 percent.