A worker shelters from the rain as he passes the London Stock Exchange in the City of London. Picture: REUTERS/TOBY MELVILLE
A worker shelters from the rain as he passes the London Stock Exchange in the City of London. Picture: REUTERS/TOBY MELVILLE

New York — A gauge of world stocks dipped on Tuesday, relinquishing earlier gains after US bond yields crossed the 3% threshold for the first time in four years, while oil prices stretched above the $75 a barrel mark.

Equities in Europe hit session lows and US stocks lost ground after the US 10-year treasury yield crossed the 3% mark to a high of 3.003%, its highest level since January 2014. In addition, the two-year yield touched 2.5% for the first time since September 2008.

Benchmark 10-year notes last fell 6/32 in price to yield 2.9939%, from 2.973%, late on Monday.

The move higher in yields dampened the appetite for stocks, which had been higher on the back of a strong batch of earnings from names such as Verizon, up 1.94% and Caterpillar, up 2.88%.

"The market has to get used to the notion that this could be just another step in reversing a trend that has been in place in the market for nearly four decades," said Frank Cappelleri, technical market analyst and trader at Instinet in New York, referring to declining rates on bond yields. "From my perspective, if this downtrend is going to break, this is the best chance of it over the last five years."

The pan-European FTSEurofirst 300 index lost 0.23% and MSCI’s gauge of stocks across the globe shed 0.16%. MSCI’s index has declined for three straight sessions, its longest losing streak in a month.

Gains on Wall Street were also hemmed in by a 4.93% drop in Google parent Alphabet as strong growth in ad sales on search and YouTube were not enough to offset a surge in costs. Google kicked off a big week for tech sector earnings, with results expected from 23 names in the group including Facebook and Microsoft.

The Dow Jones Industrial Average fell 47.44 points, or 0.19%, to 24,401.25, the S&P 500 lost 6.32 points, or 0.24%, to 2,663.97 and the Nasdaq Composite dropped 52.08 points, or 0.73%, to 7,076.52.

Chip maker AMS slumped 9.64% in Swiss trading after it reported first-quarter sales towards the lower end of its guidance range on Monday and warned of a downturn owing to weaker orders from one of its main customers. AMS did not name the customer, but the Austrian company is a big supplier to Apple, making components for the iPhone.

US earnings thus far have gotten off to the strong start expected, with the expected growth rate for the quarter currently at 21.1%, according to Thomson Reuters data. Of the 118 companies in the S&P 500 that have reported up to Tuesday morning, 77.1% have topped expectations.

Brent crude oil prices, the global benchmark, rose above $75 a barrel to their highest level since November 2014, supported by oil cartel Opec-led production cuts, strong demand, and the prospect of renewed US sanctions on Iran.

US crude rose 0.16% to $68.75 a barrel and Brent was last at $74.87, up 0.21% on the day.