(Updates to afternoon U.S. trading)
* Mixed earnings raise concern about economy
* Google shares drop, Microsoft up after results
* 10-year Treasury yields, U.S. dollar tick up
* China unveils 1 trillion yuan bond issue, Asian shares flat
Oct 25 (Reuters) - Stocks slipped on Wednesday after the latest round of earnings prompted concern among investors over the economic outlook, adding to the angst over painfully high interest rates, while benchmark U.S. Treasury yields and the dollar ticked up.
Weighing on the indexes were shares in Alphabet, which fell 9.5% after the company reported another slowdown in its cloud business, while Microsoft shares rose 2.9% after it beat estimates.
The Dow Jones Industrial Average fell 0.27%, to 33,051, the S&P 500 lost 1.36%, to 4,189 and the Nasdaq Composite dropped 2.29%, to 12,838.65.
"Tech earnings got off to a mixed start last night thanks to a focus on cloud computing, one of the big money spinners for the sector," Chris Beauchamp, IG Group chief market analyst, said.
"Stocks have picked up somewhat in the past 24 hours, but it’s now up to Meta tonight and Amazon tomorrow to provide the kind of good news that might give stocks a reason to rally into month-end."
In Europe, the STOXX 600 was little changed, after coming under pressure from a near-60% slump in shares of Worldline after the French payments company cut its financial targets. In a heavy day for bank earnings, Deutsche Bank was an outlier, with a 8% rise in its shares.
Overnight, Asian stocks rose from 11-month lows as investors cheered China's approval of a 1 trillion yuan ($137 billion) sovereign bond issue as a harbinger of stimulus, although MSCI's broadest index of Asia-Pacific shares outside Japan were little changed.
The MSCI All-World index fell 0.9%, heading for a third straight monthly decline in October, with a loss of 2.8%, largely as a function of the surge in U.S. Treasury yields.
HIGH RATES, MIXED DATA
U.S. Treasuries held onto a bounce-back after the 10-year yield breached 5% on Monday. The 10-year note last yielded 4.942%, up 10.2 basis points.
The interest rate on the most popular U.S. home loan last week jumped to the highest since September 2000 - 7.9% - driving mortgage applications to a 28-year low, a survey showed on Wednesday.
Separately, fresh data on U.S. business output showed higher levels in October, as the manufacturing sector pulled out of a five-month contraction on a pickup in new orders, and services activity accelerated modestly amid signs of easing inflationary pressures.
Strategists at Citi said the Purchasing Managers Index data was "yet another sign that a recession is not imminent."
"We continue to think the US economy will enter recession next year, but in the meantime, risks are balanced toward further Fed hikes, rather than cuts," they wrote in a note Wednesday.
Several of Wall Street's biggest names called a top on longer-dated Treasury yields, including strategists at UBS and investor Bill Ackman.
In currency markets, the dollar index gained 0.2%, while the yen was steady versus the dollar and the euro fell 0.2% on the day.
Oil prices dipped on Wednesday as demand worries stemming from gloomy economic prospects in Europe offset concerns about war escalating in the Middle East. U.S. crude rose 1.52% to $85.01 per barrel and Brent was at $89.68, up 1.83% on the day.
The United States and Russia were among several nations pushing for a pause in fighting between Israel and Hamas to allow aid into the besieged Gaza Strip.
After touching $1,997 an ounce last week, spot gold traded at $1,982, up 0.6%.
Bitcoin is up about 29% this month mostly thanks to recent speculation that ETF applications from BlackRock and others will succeed and drive capital into cryptocurrencies. Bitcoin last bought $34,672.
The U.S. Securities and Exchange Commission has declined to comment on the speculation.
(Reporting by Lawrence Delevingne in Boston and Amanda Cooper in London. Additional reporting by Tom Westbrook in Singapore; Editing by Sharon Singleton, Mark Potter and Diane Craft)
