- Yield on 10-year Treasury bills remains above 4%
- Salesforce on the best day since August 2020
- Weekly jobless claims fall more than expected
- Dow up 0.30%, S&P down 0.24%, Nasdaq down 0.58%
March 2 (Reuters) – The benchmark S&P 500 and the tech-heavy Nasdaq fell on Thursday as the 10-year Treasury yield held above 4% following market data warmer than expected, while strong results from software company Salesforce boosted the blue-chip Dow.
The yield on 10-year Treasuries hit a new four-month high of 4.07% after data showed the number of Americans filing new jobless claims fell again last week, indicating a continued strength in the labor market.
Another report showed U.S. labor costs rose faster than initially thought in the fourth quarter.
The two-year yield, which best reflects short-term rate expectations, hit a new 15-year high at 4.91%.
“It doesn’t look like the labor market is reacting to higher rates. Unit labor cost is double expectations as wages are up and productivity is down, so nothing really works in markets,” said Jack Ablin, Chief Investment Officer. manager at Cresset Capital.
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After a lackluster February, Wall Street indices started March on a volatile note as further evidence of lingering price pressures and comments from Federal Reserve policymakers stoked concerns that the US central bank would remain hawkish for longer.
The S&P 500 and Nasdaq fell on Wednesday after data showed U.S. manufacturing contracted for a fourth consecutive month in February, although commodity prices rose last month.
Traders of Fed key rate futures see an even chance that the rate will hit a range of 5.5% to 5.75% by September, from the current range of 4.5% to 4, 75%.
Monthly payrolls and consumer price data in the coming days will offer investors more clues on the path of rates ahead of the Fed’s March 21-22 meeting, where it is currently expected to raise rates by 25 basis points.
As of 11:41 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 96.67 points, or 0.30%, at 32,758.51, the S&P 500 (.SPX) was down 9.32 points, or 0.24%, to 3,942.07, and the Nasdaq Composite (.IXIC) lost 66.20 points, or 0.58%, to 11,313.29.
The S&P 500 was trading just above its 200-day moving average, seen as a key support level by traders.
“It’s a level that people would traditionally look to buy at. And we have a vacuum of any further negative catalysts until later in March, so it’s an area with no short-term downside,” said David Russell, vice president of market intelligence at TradeStation.
Salesforce Inc (CRM.N) climbed 11.6%, its best day since August 2020, after the cloud-based software company forecast first-quarter revenue above analysts’ estimates and doubled its buyout of shares at $20 billion.
Tesla Inc (TSLA.O) fell 6.4% after CEO Elon Musk and the team’s four-hour presentation failed to impress investors with few details about its proposed unveil an affordable electric vehicle.
Macy’s Inc (MN) jumped 8.7% after the department store operator forecast full-year profit above Wall Street estimates,
Silvergate Capital (SI.N) plunged 44.3% after the crypto-focused lender delayed its annual report and said it was assessing its ability to operate as a going concern.
Falling issues outnumbered advances by a ratio of 1.91 to 1 on the NYSE and 1.67 to 1 on the Nasdaq.
The S&P index recorded five new 52-week highs and 13 new lows, while the Nasdaq recorded 50 new highs and 123 new lows.
Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D’Souza, Anil D’Silva and Sriraj Kalluvila
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