WASHINGTON (dpa-AFX) - Stocks moved mostly lower during trading on Tuesday, adding to the losses posted during Monday's session. The major averages all moved to the downside on the day, with the S&P 500 dropping to its lowest closing level in over a month.
The major averages ended the day off their lows of the session but still firmly in negative territory. The Dow declined 328.09 points or 0.6 percent to 52,093.11, the Nasdaq slid 204.84 points or 0.8 percent to 25,981.57 and the S&P 500 fell 34.25 points or 0.5 percent to 7,585.73.
The weakness on Wall Street came amid a notable increase in treasury yields, with the yield on the benchmark ten-year note reaching its highest intraday level since July 2007.
Concerns about the outlook for inflation and interest rates have driven yields higher ahead of the Federal Reserve's monetary policy decision on Wednesday.
The Fed is widely expected to raise interest rates, with CME Group's FedWatch Tool currently indicating a 94.5 percent chance of a quarter point rate hike.
'Market commentators have long argued that Treasuries hitting 5% is the trigger for an equity market correction,' said Dan Coatsworth, head of markets at AJ Bell. 'At this level, investors might wonder what's the point in holding risky equities when they can get 5% on low-risk government bonds.'
He added, 'It is a psychological level and can sometimes act as a warning sign for a market correction rather than be a guaranteed tipping point for equities to slump.'
A sharp increase by the price of crude oil also weighed on stocks, with U.S. crude oil futures spiking by more than 4 percent.
Supply concerns continue to drive the price of crude oil higher amid reports of fresh Houthi strikes on Saudi Arabia.
However, traders seemed somewhat reluctant to make more significant moves ahead of the Fed's monetary policy announcement.
Sector News
Retail stocks showed a significant move to the downside on the day, dragging the Dow Jones U.S. Retail Index down by 2 percent to its lowest closing level in well over a month.
The spike in the price of crude oil also contributed to considerable weakness among airline stocks, as reflected by the 1.9 percent loss posted by the NYSE Arca Airline Index.
Software, brokerage and utilities stocks also showed notable moves to the downside, while energy stocks surged along with the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday. Japan's Nikkei 225 Index closed just below the unchanged line, while China's Shanghai Composite Index slid by 0.5 percent and Hong Kong's Hang Seng Index slumped by 1 percent.
The major European markets also moved to the downside on the day. While the German DAX Index dipped by 0.2 percent, French CAC 40 Index and the U.K.'s FTSE 100 Index fell by 0.3 percent and 0.4 percent, respectively.
In the bond market, treasuries came under pressure after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 3.5 basis points to 4.996 percent.
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