US stocks fall sharply after ten-year yield passes 5%

Wall Street fell sharply for a third straight session today after rising bond yields deflated hopes for an interest rate cut later in the year. The Dow Jones industrials fell nearly 200 points and the S&P 500 index fell below the 1,500 mark.

The yield on the US Treasury’s 10-year note passed 5% today, rising as high as 5.13% in early afternoon trading in New York, its highest point since mid-July.

The move unnerved investors who contend the Federal Reserve will be less inclined to cut short-term interest rates.

Stocks also fell as oil prices rose and as retailers turned in mixed sales results for May.

While sales figures improved from the prior month, investors faced some concerns that rising gas prices could cut into consumers’ spending money. An array of fresh economic data that was in some cases positive did not halt the selling.

The Dow fell 198.94, or 1.48%, to 13,266.73, bringing its three-day loss to more than 400 points.