Dow tumbles nearly 150 points

NEW YORK (CNNMoney.com) -- A late selloff sent the Dow industrials skidding about 146 points Wednesday on worries about rising Treasury bond yields while a steep drop in oil prices provided little support.

The 30-share Dow (down 151.85 to 13,483.57, Charts) and the tech-laden Nasdaq (down 26.80 to 2,599.96, Charts) each sank about 1 percent, according to early tallies. The broader S&P 500 (down 20.87 to 1,512.83, Charts) index lost 1.4 percent.

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Treasury bond prices fell, pushing the yield on the benchmark 10-year note back up to 5.13 percent from 5.08 percent Tuesday. Bond prices and yields move in opposite directions.

U.S. light crude oil for July delivery sank 91 cents to settle at $68.19 a barrel, according to the New York Mercantile Exchange. In currency trading, the dollar gained against the euro and the yen. COMEX gold for August delivery fell $4.70 to $660 an ounce.

Here's what was moving before the close:

Investors, who have been on edge over rising Treasury yields recently, again got spooked about higher rates Wednesday, said Rob Lutts, chief investment officer at Cabot Money Management.

"I think it's probably today's worry," said Lutts.

Fears about rising rates, combined with concerns that the Federal Reserve may have to raise interest rates later this year, prompted the recent bond market selloff that pushed the 10-year yield to a five-year high.

Investors have worried that rising rates could further damage the already battered housing market and crimp consumer spending. On top of that, higher rates could slow corporate borrowing, which has fueled much of the recent merger activity that's helped lift stocks this year.

Earlier in the session, investors cheered Home Depot's plan to repurchase $22.5 billion worth of stock, which the company announced late Tuesday. Home Depot (up $1.76 to $40.03, Charts, Fortune 500) shares jumped about 6 percent in afternoon trading.

Lower oil prices also provided a brief lift to stocks but those stock gains quickly faded. The government reported that weekly crude and gasoline supplies rose much more than expected, and U.S. light crude for July delivery sank 91 cents to settle at $68.19 a barrel, according to the New York Mercantile Exchange.

Morgan Stanley (Charts, Fortune 500) shares gained over 1 percent in afternoon trade on the New York Stock Exchange after the No. 2 Wall Street bank reported better-than-expected second-quarter earnings that jumped 40 percent.

Package delivery company FedEx (up $1.83 to $109.89, Charts, Fortune 500) barely beat analyst estimates, sending its shares nearly 2 percent higher.

And consumer electronics retailer Circuit City Stores Inc. (up $0.03 to $16.10, Charts, Fortune 500) reported disappointing profits and warned about future earnings growth. The company's shares edged higher in afternoon trade on the New York Stock Exchange.

In other corporate news, Merrill Lynch (down $2.36 to $87.68, Charts, Fortune 500) has seized about $800 million of assets from two Bear Stearns (down $3.59 to $143.20, Charts, Fortune 500) hedge funds, which are heavily invested in securities backed by subprime mortgages, putting the funds' future in doubt.

Shares of the mutual fund manger Nuveen Investments (up $8.97 to $63.13, Charts) soared about 17 percent after the company agreed Wednesday to a $5.75 billion buyout by a group of investors led by private equity firm Madison Dearborn Partners LLC.

Billionaire investor Kirk Kerkorian's Tracinda Corp. said Wednesday it was no longer interested in buying assets from casino operator MGM Mirage, which include the Bellagio and City Center properties. MGM (down $5.77 to $80.73, Charts, Fortune 500) shares tumbled on the news.

Rupert Murdoch's News Corp. (down $0.04 to $23.64, Charts, Fortune 500) may swap its social networking site MySpace for a 25 percent stake in the No. 2 search engine Yahoo (up $0.07 to $27.66, Charts, Fortune 500), a newspaper reported.

In Washington, U.S. Treasury Secretary Henry Paulson told a House committee that China is helping drive global growth but added the country needs to rely on increased domestic consumption and fewer exports in order to drive growth.

On a sector basis, energy, oil and natural gas stocks fell. One of the few sources of strength was the retail sector.

Among individual issues, 21 of the 30 Dow components fell.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by 2 to 1 on volume of 1.11 billion shares. On the Nasdaq, decliners also topped advancers by roughly the same ratio on volume of 1.42 billion shares.