US STOCKS-Nasdaq ends sharply lower after Powell comments

Reuters

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

 (Updates following end of session)
    By Noel Randewich
    March 4 (Reuters) - Wall Street ended sharply lower on
Thursday, leaving the Nasdaq down nearly 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.
    A decline of 10% from its February record high would confirm
the Nasdaq is in a correction.  
    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.
 urn:newsml:reuters.com:*:nL2N2L2100  urn:newsml:reuters.com:*: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.
    
    In a day of heavy trading on Wall Street, the Nasdaq wiped
out all of its year-to-date gains and ended down 9.7% from its
record closing high on Feb. 12. The S&P 500 has declined over 4%
from its record high close 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.  urn:newsml:reuters.com:*: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 S&P 500 energy sector index  .SPNY  jumped 2.5% and
reached a one-year high on the back of higher oil prices.  O/R  
    The Dow Jones Industrial Average  .DJI  fell 1.11% to end at
30,924.14 points, while the S&P 500  .SPX  lost 1.34% to
3,768.47. 
    The Nasdaq Composite  .IXIC  dropped 2.11% to 12,723.47.
    Volume on U.S. exchanges was 18 billion shares, compared
with the 15 billion average for the full session over the last
20 trading days.
    Apple Inc  AAPL.O , Tesla Inc  TSLA.O  and PayPal Holdings
Inc  PYPL.O  were among the largest drags on the S&P 500. Tesla
dropped almost 5%.
    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.
    Declining issues outnumbered advancing ones on the NYSE by a
3.79-to-1 ratio; on Nasdaq, a 5.62-to-1 ratio favored decliners.
    The S&P 500 posted 28 new 52-week highs and no new lows; the
Nasdaq Composite recorded 173 new highs and 151 new lows.

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GRAPHIC-Nasdaq tumbles 10% from February record high    https://tmsnrt.rs/2Olrl2v
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 (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)
 ((noel.randewich@tr.com; (415) 677 2542, Twitter: @randewich))

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