(RTTNews.com) - After failing to sustain an initial upward move, stocks have given back ground over the course of morning trading on Tuesday. The major averages pulled back off their highs of the session and into negative territory.
Currently, the major averages are turning in a mixed performance. While the S&P 500 is up 2.29 points or 0.1 percent at 2,672.58, the Dow is down 16.22 points or 0.1 percent at 24,432.47 and the Nasdaq is down 9.94 points or 0.1 percent at 7,118.66.
The initial strength on Wall Street partly reflected a positive reaction to earnings news from companies such as Caterpillar ( CAT ) and Verizon (VZ).
However, the early buying interest was offset by a continued increase in U.S. treasury yields, with the yield on the benchmark ten-year note climbing above 3 percent for the first time since early 2014.
The increase in treasury yields came following the release of some upbeat economic data, including a report from the Commerce Department showing a bigger than expected increase in new home sales in the month of March.
The report said new home sales soared by 4.0 percent to an annual rate of 694,000 in March after surging up by 3.6 percent to a revised rate of 667,000 in February. Economists had expected new home sales to climb by 1.9 percent.
With the bigger than expected increase, new home sales rose to their highest annual rate since hitting 711,000 last November. New home sales were up by 8.8 percent year-over-year.
A separate report from the Conference Board showed an unexpected improvement in consumer confidence in the month of April.
The Conference Board said its consumer confidence index rose to 128.7 in April from a revised 127.0 in March. Economists had expected the index to dip to 126.1 from the 127.7 originally reported for the previous month.
"Overall, confidence levels remain strong and suggest that the economy will continue expanding at a solid pace in the months ahead," said Lynn Franco, Director of Economic Indicators at the Conference Board.
The subsequent pullback by the markets is partly due to notable declines by Google parent Alphabet (GOOGL) and conglomerate 3M (MMM).
Alphabet is under pressure despite reporting better than expected first quarter results, while 3M is posting a steep loss after its first quarter earnings matched estimates.
Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.
Banking stocks have shown a strong move to the upside, however, with the KBW Bank Index climbing by 1.4 percent to its best intraday level in a month.
Steel and oil service stocks are also seeing considerable strength in morning trading, while tobacco stocks are extending a recent sell-off.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index jumped by 1.3 percent.
Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index is up by 0.1 percent, the French CAC 40 Index is down by 0.3 percent and the German DAX Index is down by 0.5 percent.
In the bond market, treasuries have climbed off their worst levels of the day but continue to see modest weakness. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.1 basis points at 2.994 percent.
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