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US STOCKS-Wall Street slides on tech selloff as bond yields rise

Published 25/02/2021, 18:35
Updated 25/02/2021, 18:36
© Reuters.

© Reuters.

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
* U.S. 10-year Treasury yield rises above S&P 500 div yield
* Best Buy slips on downbeat annual sales forecast
* Weekly jobless claims decline
* Indexes down: Dow 1.07%, S&P 1.57%, Nasdaq 2.42%

(Adds comment; Updates market prices)
By Devik Jain and Shreyashi Sanyal
Feb 25 (Reuters) - Wall Street's main indexes fell on
Thursday, with the Nasdaq slipping about 2.5%, as
technology-related stocks remained under pressure following a
rise in U.S. bond yields.
The benchmark 10-year Treasury yields US10YT=RR hit a
one-year high of 1.48%, prompting investors to lock in profits
on some high-flying growth stocks due to concerns over
heightened valuations. US/
The Treasury note yield also rose above S&P 500 dividend
yield, wiping out a historically strong advantage that the stock
market yield has held. Apple Inc AAPL.O , Amazon.com Inc AMZN.O , Microsoft Corp
MSFT.O , Alphabet Inc GOOGL.O , Facebook Inc FB.O and
Netflix Inc NFLX.O were down between 1.18% and 1.46%.
"The higher the yield on bonds, the more we see this push to
move out of stocks," said Jeffrey Carbone, managing partner at
Cornerstone Wealth, in Huntersville, North Carolina.
"The market is starting to get a bit frothy, so investors
are taking some gains off the growth areas of stocks, which had
the biggest movements and moving it to more conservative areas
for higher yields in the bond market."
The S&P 500 technology sector .SPLRCT and communication
services .SPLRCL were down 2.16% and 1.40%, respectively.
The S&P 500 growth index .IGX has risen 2.3% in February,
sharply underperforming the value index .IVX , which has gained
9% on optimism related to a post-pandemic reopening of the
economy.
Meanwhile, data showed fewer Americans filed new claims for
unemployment benefits last week amid falling COVID-19
infections, but the near-term outlook still remained unclear
after winter storms wreaked havoc in the South region in the
middle of this month.
Optimism about more U.S. stimulus and a quicker pace of
vaccinations at the beginning of the month have positioned the
S&P 500 .SPX and the Dow Jones .DJI indexes for their best
monthly gain since November.
However, the lack of significant new developments around the
fiscal package and the winding down of the earnings season have
caused uncertainty in the market.
"In the beginning of February, the stimulus news was the
driving force but now that it has been priced in, there is
nothing on the distant horizon for equity investors to be
excited about and there is a concern that upside is limited,"
said Mike Zigmont, head of trading and research at Harvest
Volatility Management.
At 12:27 p.m. ET, the Dow Jones Industrial Average .DJI
was down 341.74 points, or 1.07%, at 31,620.12, the S&P 500
.SPX was down 61.80 points, or 1.57%, at 3,863.63 and the
Nasdaq Composite .IXIC was down 328.82 points, or 2.42%, at
13,269.15.
Tesla Inc TSLA.O fell 5.04% after a media report that the
electric-car maker told workers it would temporarily halt some
production at its car assembly plant in California. Best Buy Co Inc BBY.N slid 9.66% on a weak full-year
forecast after missing estimates for holiday-quarter comparable
sales. Moderna Inc MRNA.O jumped 5.37% after the drugmaker said
it was expecting to post $18.4 billion in sales from its
COVID-19 vaccine this year. Declining issues outnumbered advancers for a 3.57-to-1 ratio
on the NYSE and a 3.77-to-1 ratio on the Nasdaq.
The S&P index recorded 70 new 52-week highs and no new low,
while the Nasdaq recorded 190 new highs and eight new lows.

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