While you were sleeping: UPDATED Bond selloff hits US stocks

Stocks on Wall Street and US Treasurys slid, as the latest economic data cemented bets the Federal Reserve will raise its key interest rate in December.

Yields on the 10-year Treasury note rose six basis points to 1.86%.

"People are starting to look at interest rates and where they are, and they are getting a little nervous," Charles Comiskey, head of Treasury trading in New York at Bank of Nova Scotia, one of 23 primary dealers that trade with the Fed, told Bloomberg.

"What you are seeing is what you haven't seen in some time – lower pricing is attracting selling."

At the close, the Dow Jones Industrial Average was down 29.65 points, or 0.2%, to 18,169.68. The Nasdaq Composite Index fell 0.65% to 5215.97 and the Standard & Poor's 500 Index was 0.3% lower at 2133.04.

"This is a pretty important quarter because we are expecting an inflection to put that earnings recession in the rear-view mirror and we're going to have positive earnings growth," Michael Scanlon, managing director of Manulife Asset Management, told Reuters. "Still it is not very robust."

Dow Chemical improves
In the Dow, gains in shares of DuPont and Verizon Communications offset slides in Boeing and Caterpillar, down 1.5% and 1.3%.

Dow Chemical rose 1.5% after the chemicals and agriculture company reported better-than-expected quarterly earnings.

"We see steady growth in North America and Europe continuing, with Dow's new innovations and products outpacing the market," Dow's Andrew Liveris said in a statement.

Shares of Comcast slid 2.1% as analysts downgraded their ratings on the stock, citing increased competition. Ford Motor fell 1.2% after a drop in earnings.

More corporate deals
Meanwhile, the flurry of big corporate deals continued unabated.

Qualcomm shares climbed 2.8% after agreed to buy NXP Semiconductors, the top supplier of automotive chips, for $US39 billion.

"With innovation and invention at our core, Qualcomm has played a critical role in driving the evolution of the mobile industry," Steve Mollenkopf, CEO of Qualcomm, said in a statement.

"The NXP acquisition accelerates our strategy to extend our leading mobile technology into robust new opportunities, where we will be well positioned to lead by delivering integrated semiconductor solutions at scale."

Level 3 Communications rose 11% and CenturyLink climbed 9.7% after the Wall Street Journal reported they were in merger talks.

In Europe, the Stoxx 600 Index finished the day by declining almost 0.1% from the previous close.

Germany's DAX Index added 0.1%, while the UK's FTSE 100 Index rose 0.4%. France's CAC 40 Index inched 0.02% lower.

(BusinessDesk)