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Stock markets keeping a wary eye on interest rates

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A whiff of Fed 'taper talk' and a 10-year note auction Wednesday should keep the stock market focused on interest rates.

Stocks struggled and the dollar rallied, as Treasury yields rose Tuesday amid speculation the Fed could move sooner-than-expected to slow its $85 billion bond buying program. The strong October jobs report Friday put the possibility of a Fed tapering back in play for December or January, but many Fed watchers still believe the Fed will not pare back its quantitative easing program until early next year.

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Yet, the bond market has moved forward, with the 10-year yield going from about 2.6 percent, before the jobs report to 2.78 percent by Tuesday afternoon. Stocks, wary of the sting of rising rates, were mixed with the down 32 Tuesday at 15,750, and the S&P 500 off 4 to 1767. The was flat, with less than a 1 point gain, at 3919.