US STOCKS-Rise in Treasury yields weighs on Wall St

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* 10-yr yield reaches four-month high of 3.07 pct

* Two-yr yield hits highest in over a decade

* Microsoft dips after MS says dividend hike disappoints

* Futures down: Dow 0.10 pct, S&P 0.15 pct, Nasdaq 0.14 pct

(Adds comments, updates prices)

By Shreyashi Sanyal

Sept 19 (Reuters) - U.S. stock markets were on course to dip at opening on Wednesday, as the focus shifted away from a trade spat with China to rising Treasury yields.

The 10-year U.S. Treasury yield US10YT=RR moved back above the symbolic 3 percent mark on Tuesday and hit its highest in four months early on Wednesday, while two-year rates US2YT=RR reached 2.8 percent, the highest in over a decade. US/

That points to a further squeezing in the easy monetary conditions that have supported a decade-long rally in stocks.

"Given the relatively quiet morning, investors will likely begin to look at bonds to find direction in equity markets," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

"As yields are slowly becoming the focal point, and a rise in yields would set off fears of rate hikes at an accelerated pace."

Investors have largely shrugged off this week's latest moves by the United States and China to tax imports from either country, and all three major U.S. indexes closed higher on Tuesday. 8:39 a.m. ET, Dow e-minis 1YMc1 were down 25 points, or 0.1 percent. S&P 500 e-minis ESc1 were down 4.5 points, or 0.15 percent and Nasdaq 100 e-minis NQc1 were down 10.5 points, or 0.14 percent.

Among news-driven moves, Praxair (NYSE: PX ) PX.N rose 3.1 percent in premarket trade after a person familiar with the matter told Reuters German industrial gases group Linde LIN1.DE was to sell additional assets to gain U.S. approval for the pair's planned merger. Networks JNPR.N climbed 2.2 percent after Nomura upgraded shares of the network gear maker. The brokerage said it expected a return to growth for the company's cloud business.

Microsoft MSFT.O dipped 0.7 percent after Morgan Stanley (NYSE: MS ) said that the company's dividend hike on Tuesday was below its 12-month trailing growth in operating income.

Data showed U.S. homebuilding increased more than expected in August, a positive sign for a housing market which has underperformed the broader economy amid rising interest rates for loans.