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Markets

Wall St edges lower as tech shares fall, bond yields rise

  • Jobless claims dip, but still remain elevated.
  • Best Buy slips on downbeat annual sales forecast.
  • Big tech stocks fall; banks, energy shares gain.
  • Indexes down: Dow 0.11%, S&P 0.20%, Nasdaq 0.26%.
Published February 25, 2021

Wall Street's main indexes edged lower on Thursday as heavyweight technology-related stocks remained under pressure with a rise in US Treasury yields, while data showed weekly jobless claims fell more than expected.

The benchmark 10-year Treasury yields hit a one-year high of 1.45%, prompting investors to lock in profits on some high-flying growth stocks due to concerns over heightened valuations.

Microsoft Corp, Alphabet Inc, Facebook Inc and Netflix Inc were down between 0.2% and 0.6% in early trading.

"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 financial sector, which hit a new peak, and energy were the biggest gainers among the 11 major S&P sectors.

The banks index also gained 0.43%, scaling a record high.

The S&P 500 growth index has risen 2.3% in February, sharply underperforming the value index, which has gained 9% on optimism related to a post-pandemic reopening of the economy.

Meanwhile, the Labor Department's weekly jobless claims report 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.

Federal Reserve Chair Jerome Powell on Wednesday, continued adding weight to the central bank's promise to get the economy back to full employment, and to not worry about inflation unless prices begin rising in a persistent and troubling way.

The S&P 500 and the Dow Jones are tracking their best monthly performance since November as the United States accelerates its coronavirus vaccination program and plans further fiscal spending to support the world's largest economy.

At 9:51 a.m. ET, the Dow Jones Industrial Average was down 36.71 points, or 0.11%, at 31,925.15, the S&P 500 was down 8.01 points, or 0.20%, at 3,917.42, and the Nasdaq Composite was down 35.34 points, or 0.26%, at 13,562.63.

Tesla Inc fell 1.5% 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 slid 2.9% after the consumer electronics retailer missed estimates for holiday-quarter comparable sales and provided a weak full-year forecast.

Moderna Inc jumped 8.9% after the drugmaker said it was expecting to post $18.4 billion in sales from its COVID-19 vaccine this year.

Advancing issues outnumbered decliners by a 1.08-to-1 ratio on the NYSE and a 1.09-to-1 ratio on the Nasdaq.

The S&P index recorded 61 new 52-week highs and no new low, while the Nasdaq recorded 159 new highs and three new lows.

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