May 16 (Bloomberg) — U.S. stocks fell, amid a sell off in small-cap companies, as an unexpected drop in consumer confidence offset a gain in housing starts. Treasuries slipped while the rupee strengthened for a third day.

The S&P 500 fell 0.3 percent at 10:15 a.m. in New York, after sliding 0.9 percent yesterday. The Russell 2000 Index retreated 0.5 percent. The Stoxx Europe 600 Index dropped 0.1 percent, after losing as much as 0.6 percent earlier. Yields on 10-year Treasuries rose two basis points to 2.51 percent, climbing from the lowest level since October. The rupee gained 0.9 percent against the dollar as results showed Narendra Modi's main opposition bloc will take power. Nickel climbed 2 percent.

The pace of U.S. home construction jumped in April to its highest level since November, Commerce Department figures showed today. Consumer confidence fell in May from a nine-month high, showing Americans are being shaken by rising grocery bills and elevated fuel costs. Stocks retreated yesterday and bonds rose after reports showed an unexpected drop in U.S. industrial production and less-than-forecast growth in the euro-area economy.