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Global Shares Lower on Treasury Yields 05/29 04:46

   Shares retreated Wednesday in Europe and Asia as a rise in bond yields added 
to pressure on stocks.

   TOKYO (AP) -- Shares retreated Wednesday in Europe and Asia as a rise in 
bond yields added to pressure on stocks.

   France's CAC 40 slipped 0.7% in early trading to 8,001.58, while Germany's 
DAX declined 0.4% to 18,596.23. Britain's FTSE 100 edged nearly 0.2% lower, to 
8,240.60.

   The future for the S&P 500 was down 0.6% while that for the Dow Jones 
Industrial Average slipped 0.5%.

   In Asian trading, Japan's benchmark Nikkei 225 shed 0.8% to 38,556.87. 
Australia's S&P/ASX 200 dipped 1.3% to 7,665.60. South Korea's Kospi lost 1.7% 
to 2,677.30. Hong Kong's Hang Seng slipped 1.8% to 18,477.01, while the 
Shanghai Composite was little changed, edging up less than 0.1% to 3,111.02.

   The International Monetary Fund raised its forecast for China's economic 
outlook, saying it expects the No. 2 economy to grow at a 5% annual pace this 
year. But it also warned that consumer-friendly reforms are needed to sustain 
strong, high-quality growth.

   Strong spending by U.S. consumers has been one of the main reasons the 
economy has managed to defy predictions of a recession, at least so far, but 
some cracks have begun to show. Lower-income households in particular have 
begun to buckle under the pressure of still-high inflation.

   The Fed has been holding the federal funds rate at the highest level in more 
than two decades in hopes of grinding down on the economy and investment prices 
enough to get high inflation fully under control. If it leaves rates too high 
for too long, it could kneecap the job market and overall economy. But a 
premature cut to interest rates could allow inflation to reaccelerate and 
inflict even more pain on U.S. households.

   A rise in bond yields has weighed on share prices. Higher yields can make 
payments for everything from mortgages to credit cards more expensive, and they 
tend to put downward pressure on the economy.

   On Tuesday, the S&P 500 closed little changed, just below its record set a 
week ago. The Dow Jones Industrial Average fell 0.6%, while gains in technology 
stocks pushed the Nasdaq composite up 0.6% to another all-time high.

   This week has several reports that could sway the Fed's thinking, beyond 
Tuesday's on confidence among consumers.

   The highlight likely arrives on Friday when the government releases its 
latest monthly report on spending by households and the incomes that they 
earned. It will also include the measure of inflation for April that the 
Federal Reserve prefers to use.

   In other trading, benchmark U.S. crude rose 72 cents to $80.55 a barrel in 
electronic trading on the New York Mercantile Exchange. Brent crude, the 
international standard, added 74 cents to $84.96 a barrel.

   In currency trading, the U.S. dollar was unchanged at 157.12 Japanese yen. 
The euro cost $1.0839, down from $1.0857.

 
 
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