Stocks fell modestly Wednesday, as spiking Treasury yields and rising commodity prices added to concerns that inflation could limit any U.S. economic recovery. Treasury prices fell, boosting the corresponding yields. The benchmark 10-year note fell two-thirds of a point and its yield rose to 3.94 percent from 3.86 percent on Tuesday. The yield had risen as high as 4 percent. Stock prices and bond yields move in opposite directions. The concerns about rising yields overshadowed any relief about Chrysler's completed deal with Fiat and Home Depot's improved forecast. Italian automaker Fiat closed a deal to buy the valuable assets of bankrupt Chrysler, after the U.S. Supreme Court allowed the agreement to proceed. Fiat will take a 20 percent stake in the new company to start with, but that holding can grow to 35 percent if the company reaches certain goals. The new company, called the Chrysler Group, will be majority owned by the United Auto Workers union, and the U.S. and Canadian governments will hold minority stakes. The Federal Reserve (Fed) released its “beige book” survey on the U.S. economy on Wednesday, showing it remained weak or got weaker between mid-April and early May, though five of the 12 Fed districts said there were signs the pace of the recession is slowing. Another government report showed the U.S. trade deficit widened to $29.2 billion in March. Light sweet crude oil for July delivery rose $1.32 to settle at $71.33 a barrel on the New York Mercantile Exchange, building on earlier gains after the U.S. government's weekly petroleum inventory report showed a surprising drop in crude supplies. The U.S. dollar gained versus the euro and the yen. The Dow Jones industrial average fell 24.04, or 0.3 percent, to 8,739.02. Home Depot said it now expects full-year profits to be between flat and down 7 percent, compared to its earlier prediction of a 7 percent decline. Shares of the home-improvement retailer were little changed. The broader Standard & Poor's 500 index fell 3.28, or 0.35 percent, to 939.15. The technology-heavy Nasdaq composite index fell 7.05, or 0.4 percent, to 1,853.08. The New York Stock Exchange composite index was virtually unchanged, falling 3.51 to 6,098.06. The American Stock Exchange composite index rose 1.59 to 1,614.37. And the Russell 2000 index fell 4.22 to 523.71.
