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Bonds are getting smoked

May 19, 2015, 19:32 IST

Stocks opened lower on Tuesday after the Dow and S&P 500 closed at all-time highs to start the week.

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Near 9:43 a.m. ET, the Dow was down 8 points, the S&P 500 was down less than a point, and the Nasdaq was up 5 points.

The big moves on Tuesday, however, are happening in bonds and in the US dollar.

Bonds are selling off and yields are climbing.

The yield on the benchmark 10-year Treasury note rose to a year-to-date high of 2.303%, a climb of about 5 basis points, or 0.05%.

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The long 30-year bond yield was also up 5 basis points at around 3.07%.

The US dollar rallied after we got strong data on housing starts last month. The dollar index rose by more than 1% to as high as 95.94. On Monday, the dollar rebounded from a four-month low.

In April, housing starts surged to the highest level since November 2007. Data out this morning showed that starts rose 20.2% to an annualized pace of 1.135 million, versus expectations for a 9.6% rise to an annualized rate of 1.01 million.

Building permits rose 10.1% to an annualized pace of 1.143 million, versus forecasts for a 2.1% to an annualized pace of 1.06 million.

We got more retail earnings this morning. Wal-Mart missed on the top and bottom lines in the first quarter, taking a knock on earnings from foreign currency headwinds and the wage rise it announced in February. Its stock fell by more than 3% in early trading.

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But TJX Companies - parent of TJ Maxx - beat on earnings and revenues, and rose by more than 3%.

Urban Outfitters reported a big miss on Monday evening, leading Oppenheimer analysts to downgrade the stock. It fell by more than 14% on Tuesday.

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