NEW YORK (AP) -- Treasury yields rose Tuesday, and U.S. stock indexes were down modestly after the head of the Federal Reserve said that he's feeling more optimistic about the economy.
The testimony by Fed Chairman Jerome Powell before Congress was highly anticipated, and investors dissected his every word for clues about how quickly the central bank will raise interest rates in the face of a growing economy and the threat of higher inflation.
KEEPING SCORE: The Standard & Poor's 500 was down 10 points, or 0.4 percent, at 2,768, as of 11:30 a.m. Eastern time. It is coming off a three-day winning streak and is now down 3.7 percent from its record high, which was set last month. The index had been down as much as 10 percent earlier this month.
The Dow Jones industrial average fell 48, or 0.2 percent, to 25,660, and the Nasdaq composite dropped 41, or 0.6 percent, to 7,380.
FED SPEAK: Powell made his first public comments as head of the Federal Reserve, and he reaffirmed to the House Financial Services Committee that the central bank plans to raise interest rates gradually as the economy improves.
The Fed increased rates three times last year, and investors are debating whether this year will see three or four more moves. The market got spooked last month when potential signs of inflation strengthened, which raised expectations that the Fed may become more aggressive and knocked stock prices down by 10 percent around the world.
Powell also said that his personal outlook for the economy has strengthened since December, in response to a question about whether the recently passed tax cut and other moves by Congress have changed his outlook for how quickly the Fed will tighten financial conditions.
YIELDS: Treasury yields rose as Powell answered questions before the House committee.
The yield on the 10-year Treasury note climbed to 2.91 percent from 2.86 percent late Monday. It had been down earlier in the morning.
The two-year Treasury yield, which is more influenced by expectations for Fed movements, climbed to 2.26 percent from 2.23 percent.
REGISTERS RINGING: Macy's jumped to one of the biggest gains in the S&P 500 after the retail giant reported sales and profits that were comfortably ahead of expectations. It also gave a forecast for 2018 earnings that was higher than analysts expected.
Macy's rose $1.25 cents, or 4.6 percent, to $28.70.
SKY SALE: Comcast had one of the biggest losses in the S&P 500 after it launched a bid for European pay TV broadcaster Sky. The buyout offer is for 22.1 billion pounds ($29.5 billion), and Comcast's Class A shares lost $2.42 or 6.1 percent, to $37.16.
Shares of Walt Disney also fell because the Comcast bid could disrupt its takeover offer for 21st Century Fox. Disney lost $4.28, or 3.9 percent, to $105.53.
MARKETS OVERSEAS: Stock indexes were mixed in Europe, with France's CAC 40 close to flat and Germany's DAX down 0.3 percent. The FTSE 100 in London was virtually flat.
In Asia, Japan's Nikkei 225 jumped 1.1 percent, South Korea's Kospi dipped 0.1 percent and the Hang Seng in Hong Kong lost 0.7 percent.
COMMODITIES: Benchmark U.S. crude slipped 49 cents to $63.42 per barrel. Brent crude, the international standard, dropped 54 cents to $66.75 per barrel.
Gold fell $13.90 to $1,318.90 per ounce.
CURRENCIES: The dollar rose to 107.46 Japanese yen from 106.91 yen late Monday. The euro dipped to $1.2242 from $1.2312, and the British pound fell to $1.3896 from $1.3968.