Wall St slips as rising Treasury yields stifle stock market rally

  • US private sector payroll rises in September – ADP
  • Twitter drops from 1-year high to all-time high, Tesla drops 6%
  • Energy stocks jump as OPEC+ agrees to drastically cut oil production
  • Indices down: Dow 0.97%, S&P 1.31%, Nasdaq 1.86%

Oct 5 (Reuters) – Wall Street fell on Wednesday as a two-day rally in U.S. stocks was halted by rising Treasury yields after data showed firm demand in the labor market despite the rise interest rates.

The benchmark S&P 500 (.SPX) has gained 4% so far this week as yields fell for two straight sessions on weaker US economic data, the UK fiscal U-turn and rising rates lower than expected in Australia.

But yields on 10-year Treasuries rallied sharply as economic data failed to bolster recent hopes that the Federal Reserve might adopt a less hawkish policy.

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Adding to the impetus, data from ADP showed U.S. private employers stepped up hiring in September, indicating more room for the Federal Reserve to remain aggressive in its rate hike stance. Read more

“There are a few more jobs created or opened than the market expected and that suggests the Fed is not going to pivot in November,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield. , Connecticut.

The Institute for Supply Management’s services sector employment indicator also soared, suggesting that demand for labor remains strong, while overall industry has slowed slightly. in September. Read more

The private payrolls and ISM reports come ahead of a more comprehensive and closely watched employment report from the Department of Labor for September on Friday.

Rate-sensitive technology and related stocks like Nvidia Corp (NVDA.O), Amazon.com (AMZN.O), Apple Inc (AAPL.O) and Alphabet Inc (GOOGL.O) fell between 1.3% and 2.8%.

“The market has not yet completed its capitulation,” said Peter Cardillo, chief market economist at Spartan Capital Securities LLC.

“The last two days were just a rally in the bear market and the market desperately needs to capitulate before we can see any stabilization.”

As of 11:35 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 293.33 points, or 0.97%, at 30,022.99, the S&P 500 (.SPX) was down 49.83 points, or 1.31%, to 3,741.10, and the Nasdaq Composite (.IXIC) was down 207.34 points, or 1.86%, to 10,969.07.

Banks (.SPXBK) fell 2% after jumping 4.4% in the previous session.

Ten of the 11 major S&P 500 sectors fell, with stocks of utilities (.SPLRCU) and real estate (.SPLRCR) leading the losses.

Energy stocks (.SPNY) were the lone winners, up 1.5% after OPEC+ agreed to its deepest oil production cuts since the 2020 COVID pandemic, dampening supply in an already tight market. Read more

Twitter Inc (TWTR.N) lost momentum online with peers, a day after jumping 22% after billionaire Elon Musk decided to go ahead with his initial $44 billion bid to take the social media company private . Read more

Tesla Inc (TSLA.O), the electric car maker led by Musk, fell 6.1%.

Falling issues outnumbered advances by a 5.29-to-1 ratio on the NYSE and a 3.36-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and nine new lows, while the Nasdaq recorded 29 new highs and 80 new lows.

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Reporting by Ankika Biswas and Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur

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Sallie R. Loera