Stocks Lower Following Weak Results From 10-Yr Auction

Stocks are lower this afternoon after results of a 10-year U.S. Treasury auction was weaker than expected. The yield on the auction was 3.99%, which is a new high for the year. A similar auction yielded 3.19% on 5/6/09 and 2.95% on 4/9/09.

At 2PM, the Dow was down 108, the Nasdaq was down 29 and the S&P 500 was down 13.

Yields on the 10-year note rose above 4% and the 30-year yield touched 4.77%, the highest in a year.

The higher yield shows that investors are concerned about the high level of government borrowing, a weak dollar and possible inflation. The higher yield also means it costs the government more to finance its borrowing. The higher yield will also translate into higher mortgage rates and other consumer debt.

Earlier there were reports Russia said it may switch some of its reserves from U.S. debt.

Some ETFs to watch on the movement in treasury yields includes: iShares Barclays 7-10 Year Treasury (NYSE: IEF), UltraShort 7-10 Year Treasury ProShares (NYSE: PST), iShares Barclays 20+ Year Treas Bond (NYSE: TLT) and UltraShort 20+ Year Treasury ProShares (NYSE: TBT).

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