US STOCKS-Nasdaq ends sharply lower after Powell comments


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    * Weekly jobless claims rise less than expected
    * Nasdaq wipes out 2021 gains    

 (Updates with end of session)
    By Noel Randewich
    March 4 (Reuters) - Wall Street ended sharply lower on
Thursday, leaving the Nasdaq down around 10% from its February
record high, after remarks from Federal Reserve Chair Jerome
Powell disappointed investors worried about rising longer-term
U.S. bond yields.
    The benchmark 10-year Treasury yield  US10YT=RR  spiked to
1.533% after Powell's comments, which did not point to changes
in the Fed's asset purchases to tackle the recent jump in
yields. It still held below last week's one-year high of 1.614%.
    Some investors had expected the Fed might step up purchases
of long-term bonds, helping push down long-term interest rates.*:nL2N2L2100*:nL2N2L126D
    "The market has been worried about the rise in long-term
interest rates and the Fed chairman in his commentary didn't
really push back towards this increase in rates and the market
took it as a signal that yields could rise further, which is
what has happened," said Scott Brown, chief economist at Raymond
James in Florida.
    The Nasdaq wiped out all of its year-to-date gains and was
down about 10% from its record closing high on Feb. 12. 
    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.*:nL2N2L132M
    The crucial monthly payrolls report is expected on Friday.
    Wall Street has been under pressure in recent sessions as a
spike in U.S. bond yields hurt valuations of high-flying tech
stocks. Stocks expected to thrive as the economy reopens
outperformed in recent weeks due to expectations of a new round
of fiscal aid and vaccinations.
    The energy sector  .SPNY  touched a one-year high on the
back of higher oil prices.  O/R  
    Unofficially, the Dow Jones Industrial Average  .DJI  fell
1.11% to end at 30,923.55 points, while the S&P 500  .SPX  lost
1.34% to 3,768.58.
    The Nasdaq Composite  .IXIC  dropped 2.11% to 12,723.47.
    Apple Inc  AAPL.O , Tesla Inc  TSLA.O  and PayPal Holdings
Inc  PYPL.O  were among the largest drags on the S&P 500. 
    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.
    "Valuations are at the high end of historic ranges, so you
are seeing selling, especially in the higher valuation areas
like the Nasdaq and tech general," said Tim Ghriskey, chief
investment strategist at Inverness Counsel in New York.

GRAPHIC-Nasdaq tumbles 10% from February record high
 (Reporting by Noel Randewich in Oakland, California; Additional
reporting by Shashank Nayar and Nayar Medha Singh in Bengaluru;
Editing by Maju Samuel and Lisa Shumaker)
 ((; (415) 677 2542, Twitter: @randewich))

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