US bonds crack 3% as Nasdaq ponders cryptocurrencies

A topsy-turvy market ended with 10-year US treasury yields nudging over 3% and the US dollar at its highest in 15 weeks.

Some of the negative news came from tech stocks, with the Nasdaq slipping to its fifth straight loss this week. The technology index is now back to where it was on March 27, at 7003.74 after Twitter dropped more than 4% as analysts questioned its growth speed.

But the exchange could be interested in becoming a platform for trading cryptocurrencies such as bitcoin, according to the company’s chief executive Adena Friedman.

“If we do look at it and say 'it's time, people are ready for a more regulated market,' for something that provides a fair experience for investors.

“I believe that digital currencies will continue to persist – it's just a matter of how long it will take for that space to mature – once you look at it and ask, 'do we want to provide a regulated market for this?' Certainly, Nasdaq would consider it,” Ms Friedman says.

The company announced a collaboration with cryptocurrency exchange Gemini, founded by early bitcoin investors and Facebook claimants Tyler and Cameron Winklevoss. Gemini will have access to Nasdaq's surveillance technology to help make sure the platform provides a fair and "rules-based marketplace," for their own participants, Tyler Winklevoss said in a statement.

Meanwhile, the 10-year US Treasury yield has cracked the “psychologically important” level of 3% but investors and analysts aren’t uniformly clear on what that means for the market.

The benchmark 10-year note yield edged up to 3.035% for a second day. Should it rise above 3.041%, its peak in January 2014, it will be in territory not seen since summer 2011.

A rising yield on the bond, which helps to set prices for global debt instruments, could spur central banks to lift interest rates, increasing the costs of borrowing for companies. Since the US is now at the longest stretch of time without a recession, analysts and traders worry rising interest rates could trigger a fresh crisis.

However, others say the fear is overblown. US-based Mint Partners head of capital markets Bill Bain told CNBC breaking through the 3% mark doesn’t “spell the end of the stock market” and neither will it “trigger the global market reset.”

“If the Fed hikes five or six times, rates will still be below long-term trend. But the market's talking-heads have got it into their heads that 3% 10-year yields are a gathering storm, a looming crisis and moment to despair. Let them worry,” he says.

And as most other currencies weakened, the US dollar rose by 0.48%. The euro ended down 0.49% to $US1.2172, the weakest in three months. The Turkish lira reversed its gain despite its central bank raising one of its lending rates.

The British pound decreased 0.3% to $US1.3933, the weakest in almost six weeks and the Japanese yen dipped 0.5% to 109.34 per US dollar, after hitting the weakest in 11 weeks with its sixth straight decline.

The Dow Jones Industrial Average rose 59.70 points, or 0.25%, to 24,083.83, the S&P 500 gained 4.84 points, or 0.18%, to 2,639.40 and the Nasdaq Composite dipped 3.62 points, or 0.05%, to 7,003.74.

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