The US markets ended lower on Tuesday as treasury yields rose after the Treasury Department revealed this month's auction of $24 billion worth of thirty-year bonds. The thirty-year bond auction drew a high yield of 2.000 percent and a bid-to-cover ratio of 2.19, while the ten previous thirty-year bond auctions had an average bid-to-cover ratio of 2.33. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold. Weakness also prevailed in the markets after the Labor Department released a report showing consumer prices in the US saw the biggest monthly increase in thirteen years in the month of June. The Labor Department said its consumer price index jumped by 0.9 percent in June after climbing by 0.6 percent in May. Street had expected consumer prices to rise by 0.5 percent.
The bigger than expected increase in consumer prices reflected the biggest advance since prices surged up by 1.0 percent in June of 2008. Excluding food and energy prices, core consumer prices still jumped by 0.9 percent in June following a 0.7 percent increase in May. Core prices were expected to rise by 0.4 percent. The annual rate of consumer price growth accelerated to 5.4 percent in June from 5 percent in May, reaching the highest level since a matching spike in August of 2008. Core consumer prices were up by 4.5 percent year-over-year in June, reflecting an acceleration from the 3.8 percent jump in May. Core prices saw the biggest annual increase since November of 1991.
Dow Jones Industrial Average fell 107.39 points or 0.31 percent to 34,888.79, Nasdaq dropped 55.59 points or 0.38 percent to 14,677.65 and S&P 500 was down by 15.42 points or 0.35 percent to 4,369.21.
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