Stocks turn mixed; Treasury yields breach 3 percent level

Bloomberg

Major US equity indexes followed European and Asian stocks higher as the corporate earnings season gathers pace. Benchmark 10-year Treasury yields pierced the 3 percent level for the first time since 2014, while the dollar retreated from the highest level since January.
Corporate earnings remained in focus with 180 S&P 500 firms reporting this week. Alphabet Inc. slipped as capital spending raised concerns on profit margins. Eli Lily Co. rallied after boosting its revenue forecast. 3M Co. slumped after cutting the top end of its sales outlook, while Coca-Cola Co. was little changed on its results. Amgen Inc. and Capital One Financial Corp. report after markets close.
The Stoxx Europe 600 Index eked out a second day rising as traders assessed a mixed bag of corporate results. The yen retreated, helping spur Japan’s Topix index to the highest in almost two months, and Chinese shares rallied on signs the government may ease off tightening measures if warranted.
“For us it’s more the reasons why we’re seeing the move: better growth outlook, a little bit more inflation and faster rate hikes being priced in by the market,” Kerry Craig, Melbourne-based global market strategist at JPMorgan Asset Management, told Bloomberg TV. “It should be reaffirming the fact that we see a global economy that’s looking relatively healthy.”
Investors are weighing the implications of climbing bond yields that have been spurred in part by higher commodity prices and concern surrounding their inflationary impact on the wider economy. But volatility in interest-rate markets remains low and equity price swings are well off the highs seen earlier this year, indicating investors believe rising borrowing costs may not be enough to cause outsized pain to equities — for now.
Elsewhere, aluminum extended its biggest slump since 2005 after the US signalled it may lift United Co.
Rusal sanctions if Oleg Deripaska divests control of the company. Rusal shares in Hong Kong posted their biggest-ever gain. West Texas oil approached $69 a barrel amid flaring geopolitical tensions and expectations for a decline in US crude stockpiles.
US GDP and jobless claims are due. Earnings season continues. Among those reporting: Amazon.com, Samsung and Credit Suisse.
The European Central Bank has a rate decision on Thursday. Investors will watch for any sign that officials are preparing a shift in stimulus plans for their June meeting. Bank of Japan announces its latest policy decision on Friday and releases a quarterly outlook report.
The S&P 500 Index rose 0.2 percent in New York, while the Dow Jones Industrial Average gained 0.2 percent and the Nasdaq Composite Index increased 0.1 percent. The Stoxx Europe 600 Index fell 0.1 percent and the MSCI Asia Pacific Index rose 0.4 percent. The UK’s FTSE 100 Index gained 0.2 percent, reaching the highest in more than 11 weeks on its sixth consecutive advance. The MSCI Emerging Market Index fell 0.1 percent to the lowest in almost three weeks.
The Bloomberg Dollar Spot Index fell 0.1 percent after reaching the highest in three months. The euro was little changed to $1.2208. The British pound rose 0.1 percent to $1.3960. The Japanese yen weakened 0.3 percent to 109.09 per dollar. The yield on 10-year Treasuries rose two basis points to 2.99 percent. West Texas Intermediate crude was little changed at $68.60 a barrel, after reaching the highest in three years.