 "Jerome Powell")
By Shashank Nayar and Medha Singh
(Reuters) - The S&P 500 firmed on Thursday after two days of losses while sentiment was fragile ahead of remarks from Federal Reserve Chair Jerome Powell on rising bond yields.
The Nasdaq nearly wiped out all of its year-to-date gains and was down about 8% from its record closing high on Feb. 12. A 10% decline would confirm a correction territory.
In contrast, the Dow has fallen about 1.8% from its all-time closing peak on Feb. 24, while the S&P 500 is down 2.7% from its record close on Feb. 12.
"There is a fork in the road for markets which is best served with a correction ... which is what we are seeing now as concerns of lofty tech valuations and elevated yield levels affect sentiment," said Jason Ader, chief executive officer at SpringOwl Asset Management.
Also Read
Latest data showed the number of Americans filing for jobless benefits rose last week, likely boosted by brutal winter storms in the densely populated South, though the labor market outlook is improving amid declining new COVID-19 cases.
The crucial monthly payrolls report is expected on Friday.
Wall Street's main indexes fell in the past two sessions as a spike in U.S. bond yields pressured high-flying tech stocks while economy-linked stocks outperformed on hopes of a new round of fiscal aid and vaccinations.
The energy sector enjoyed a 1% jump on the back of higher oil prices. Tesla Inc and PayPal Holdings Inc were among the top drags on the S&P 500.
Powell is set to speak at a Wall Street Journal conference at 12:05 p.m. ET (1705 GMT) where his comments will be scrutinized for any hints of concern about last week's jump in bond yields, in what will be his last outing before the Fed's March 16-17 policy meeting.
Ahead of Powell's remarks, the 10-year Treasury yields were at 1.474% but they held below last week's one-year high of 1.614%.
Tech stocks are particularly sensitive to rising yields because their value rests heavily on future earnings, which are discounted more deeply when bond returns go up.
At 11:29 a.m. ET, the Dow Jones Industrial Average rose 43.10 points, or 0.14%, to 31,313.19, the S&P 500 gained 1.98 points, or 0.06%, to 3,821.91 and the Nasdaq Composite lost 40.35 points, or 0.31%, to 12,957.36.
Democrats in the U.S. Senate said on Thursday they had modified President Joe Biden's $1.9 trillion coronavirus relief package to steer more aid to smaller U.S. states as they prepared to begin a lengthy debate on the bill.
Disney's shares dropped 1.4% after the company announced it will close at least 60 Disney retail stores in North America this year and about 20% of its worldwide total, as it revamps its digital shopping platforms to focus on e-commerce.
Declining issues outnumbered advancers by a 1.4-to-1 ratio on the NYSE and by a 2.9-to-1 ratio on the Nasdaq.
The S&P 500 posted 26 new 52-week highs and no new low, while the Nasdaq recorded 180 new highs and 237 new lows.
(Reporting by Shashank Nayar in Bengaluru; Editing by Maju Samuel)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
