Updated from 3 p.m. ET with news from Russia in sixth paragraph.
NEW YORK (TheStreet) -- Heavy falls across U.S. equities on Thursday were more about bond markets dictating sentiment than warnings from a bearish hedge fundie.
U.S. 10-year Treasury yields have shed more than 6% the past three days, touching their lowest level in almost a year on Thursday. This was triggered by fresh speculation of more European stimulus after the eurozone economy grew just 0.2% in the first quarter. The U.S. has done little better with a 0.1% result, though we're blaming the weather for that inning. Here's hoping Yellen will providing soothing commentary after market close: perhaps reassuring that monetary policy will remain accommodative for longer, or something of equal shock value.
In any case, poor economic data has been sufficient impetus for hungry bond buyers, and further fueled by reports that Germany's Bundesbank would support more ECB stimulation.
Hedge fund manager David Tepper was also a help to short-sellers, warning investors at a Las Vegas gathering Wednesday, "The market is kind of dangerous right now" and noting on the global outlook, "The ECB better ease in June, I'm nervous."
If the ECB does ease, then U.S. markets will get a boost. But don't get too excited -- look how far we've already come. We might touch new highs again short term, but see what happens when the breadth ain't there? Those records this week, it all seems so long ago...
In late breaking news: Russian President Vladimir Putin has said the country will only deliver gas to Ukraine if it pays in advance in cash, starting from June. Seems those IMF funds will be put to good use.
Closer to home, the retailers aren't helping sentiment. Walmart(WMT) - Get Report and Kohl's(KSS) - Get Reportdisappointed on earnings, with low expectations for J.C. Penney(JCP) - Get Report. And other bellwethers of risk sentiment are also lower, with tech stocks and small caps suffering - the Russell 2000 just a few points off official correction territory.
-- By Jane Searle in New York
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