A spike in long-term interest rates rattled investors Tuesday, nudging major U.S. stock indexes lower for the second day in a row.
The market nearly clawed back all the way from an early slump that dragged the Dow Jones industrial average down as much as 180 points in the first half-hour of trading. The price of oil closed above $60 a barrel for just the third time this year, giving a boost to energy stocks.
Traders around the world have been selling off government bonds in recent weeks. That trend accelerated on Tuesday, bringing down bond prices and, in turn, driving up the benchmark U.S. bond yield to the highest level since late November. Weakness in bond prices pushes up the cost of borrowing, including mortgages and other loans, which can act as drag on the economy.
"A dramatic increase in yields brought our market down in the morning, and as the pressure on the bonds eased up the stock market came back," said David Chalupnik, head of equities at Nuveen Asset Management.
The Dow fell 36.94 points, or 0.2 percent, to 18,068.23. The Standard & Poor's 500 index lost 6.21 points, or 0.3 percent, to 2,099.12. The Nasdaq composite slid 17.38 points, or 0.4 percent, to 4,976.19. The three indexes are up for the month and year.
