Major Concerns as U.S. 10-Year Yields Test 3%

Gold slips to 2-week low as rising bond yields support US dollar

And investors, after initially applauding Caterpillar's first-quarter results, were unnerved when a Caterpillar executive told analysts that the first quarter might be a "high-water mark" for the year. Bond prices continue to fall and the yield on the 10-year Treasury note is getting close to 3 per cent, a milestone it hasn't reached since January 2014. The S&P 500 finished flat at 2,670, with the 1.07% gain in materials offset by the 0.43% decline in the tech sector. The Nasdaq composite dropped 49 points, or 0.7 percent, to 7,079. The stock fell in early trading, as did rival Mattel, but after months of losses for both stocks, investors found reasons for some optimism.

SMALL GOES BIG: American consumers got more confident in the economy in April, according to a survey by the Conference Board.

Yields likely drew support from strong consumer confidence and home pricing data released on Tuesday. In the technology industry, electronics manufacturer Sanmina-ICU jumped 20.2 percent to $33.30. That helped energy companies finish higher.

Alphabet's news dragged down other tech darlings, wiping nearly $85 million in market value from the FANG stocks - which, besides Google's parent, also includes Facebook (down 3.7 percent), Amazon (down 3.8 percent) and Netflix (off 3.6%).

After falling for three previous sessions, spot gold edged up 0.2 percent to $1,327.20 per ounce by 0632 GMT.

Walmart fell 1 percent after Bloomberg reported that the retailer might spend $12 billion to buy the majority of Indian e-commerce company FlipKart.

INDUSTRIAL WEAKNESS: 3M, which makes Post-it notes and industrial coatings and ceramics, shed 8.3 percent to $197.92 after it cut its annual forecast.

BONDS: Bond prices were little changed after an early dip. On Monday, the United States government 10-year note - a benchmark for mortages and corporate borrowing - rose as high as 2.995 per cent, before falling back to 2.962 in Asia on Tuesday.

The 10-year Treasury yield, a benchmark used to price everything from mortgages to federal student loans, rose to 3% for the first time in four years on Tuesday in part due to fears of rising inflation and expectations of more Fed interest rate hikes this year.

But just as importantly, higher bond yields offer a safer alternative for generating income, something largely lacking through years of rock-bottom rates after the financial crisis.

Global stocks mostly rose Tuesday as company earnings reports continued to largely beat expectations, suggesting the economy remains strong despite concerns about trade. That pushed stocks higher by making bonds less appealing by comparison. The dollar rose 0.1% against the Japanese yen to ¥108.81. Wholesale gasoline rose 1.3 percent to $2.12 a gallon. Brent crude, used to price worldwide oils, gained 46 cents to $75.17 per barrel in London. Brent crude, used to price global oils, gained 0.9 percent to $74.71 per barrel in London.

OVERSEAS: Germany's DAX lost 0.2 percent while the French CAC 40 added 0.1 percent.

-The British pound rose 0.3 percent to $1.3980.

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