Stocks slip as the 10-year yield hits its highest level since 2002

NEW YORK — Wall Street closed modestly lower on Tuesday as rising bond yields and a gloomy consumer survey outweighed hopes for progress in U.S.–Iran diplomacy.

The S&P 500 fell 0.2% to 7,670.84. The Dow Jones Industrial Average dropped 131.59 points, or 0.3%, to 51,349.92, and the Nasdaq Composite slipped 0.1% to 26,797.54.

Yields keep climbing

The yield on the 10-year Treasury rose to about 5.25%, its highest level since 2002. Higher yields raise borrowing costs for mortgages, car loans and businesses, and they make stocks look more expensive by comparison. Investors have been pricing in stubborn inflation tied in part to elevated energy costs from the Gulf conflict.

Oil eased as traders weighed the chance that talks with Tehran continue, with U.S. crude settling a little above $91 a barrel.

Biggest movers

Fair Isaac, the company behind FICO credit scores, plunged more than 20% after federal housing regulators said mortgage lenders will be able to price loans using a rival score (see related story). Carnival jumped about 12% after beating third-quarter forecasts, and Bloom Energy climbed roughly 11% on an improved outlook. Nvidia fell 0.7%, while Broadcom rose 1.6%.

Consumer confidence falling to a 12-year low added to worries that households could pull back on spending heading into the holiday season.