Rising U.S. yields takes edge off stocks rally

Rising U.S. yields takes edge off stocks rally

The prospect of better risk-free returns weighed on equities and MSCI's broadest index of Asia-Pacific shares outside Japan was stalled just shy of Tuesday's record peak.Japan's Nikkei fell 0.7% and S&P 500 futures ESc1 slipped 0.3% after the index posted a small fall overnight."You're basically taking away a deflation worry," said Rob Carnell, chief economist in Asia at ING."It's a general sense that things are moving back to normal, and probably the single biggest driver of that is the fall in COVID numbers in U.S., it's the re-opening that really delivers you the growth," he said.New COVID-19 cases in the United States fell for a fifth consecutive week last week.  The bonds selloff, which was jump-started in January when Democrats won control of the U.S. Senate, has now added almost 40 basis points to U.S. 10-year yields this year as investors price in heavy government borrowing for stimulus spending.Overnight on Wall Street, the Dow Jones .DJI was helped to a record closing high by gains from banks, which benefit from higher yields, while the S&P 500 .SPX fell 0.06% and the Nasdaq dropped 0.3%.  Besides a cooling in stock-market exuberance, gold and the Japanese yen, have been other casualties of