(For a Reuters live blog on U.S., UK and European stock markets, click LIVE\/ or type LIVE\/ in a news window)<\/p>\n
* Weekly jobless claims rise less than expected<\/p>\n
* Nasdaq wipes out 2021 gains (Updates with end of session)<\/p>\n
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.<\/p>\n
The benchmark 10-year Treasury yield spiked to 1.533% after Powell\u2019s comments, which did not point to changes in the Fed\u2019s asset purchases to tackle the recent jump in yields. It still held below last week\u2019s one-year high of 1.614%.<\/p>\n
Some investors had expected the Fed might step up purchases of long-term bonds, helping push down long-term interest rates.<\/p>\n
\u201cThe market has been worried about the rise in long-term interest rates and the Fed chairman in his commentary didn\u2019t 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,\u201d said Scott Brown, chief economist at Raymond James in Florida.<\/p>\n
The Nasdaq wiped out all of its year-to-date gains and was down about 10% from its record closing high on Feb. 12.<\/p>\n
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.<\/p>\n
The crucial monthly payrolls report is expected on Friday.<\/p>\n
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.<\/p>\n
The energy sector touched a one-year high on the back of higher oil prices.<\/p>\n
Unofficially, the Dow Jones Industrial Average fell 1.11% to end at 30,923.55 points, while the S&P 500 lost 1.34% to 3,768.58.<\/p>\n
The Nasdaq Composite dropped 2.11% to 12,723.47.<\/p>\n
Apple Inc, Tesla Inc and PayPal Holdings Inc were among the largest drags on the S&P 500.<\/p>\n
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.<\/p>\n
\u201cValuations 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,\u201d said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.<\/p>\n