Wall St slides as rising Treasury yields snuff out stock rally



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U.S. private payrolls increase in September - ADP

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Twitter eases from one-year high, Tesla falls 6%

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Energy stocks jump as OPEC+ agrees deep cuts to oil production

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Indexes down: Dow 0.97%, S&P 1.31%, Nasdaq 1.86%

(Updates prices, details)

By Ankika Biswas and Bansari Mayur Kamdar

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

The benchmark S&P 500 .SPX index has gained 4% so far this week as yields fell for two straight sessions on softer U.S. economic data, UK's tax turnaround and Australia's smaller-than-expected rate hike.

But the yields on the 10-year Treasury note US10YT=RR recovered sharply as economic data failed to reinforce recent hopes that the Federal Reserve might pivot to a less hawkish policy stance.

Adding to the boost, ADP data 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.

"It's a little bit more jobs being created or opened than the market was expecting and that leads to the belief that the Fed is not going to be pivoting in November," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

The Institute for Supply Management's services industry employment gauge also shot up suggesting demand for labor remains strong, while the overall industry slowed modestly in September.

The private payrolls and ISM reports come ahead of a more comprehensive and closely watched employment report from the Labor Department 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 yet to complete a capitulation," said Peter Cardillo, chief market economist at Spartan Capital Securities LLC

"The past couple of days was just basically a rally in the bear market and the market needs desperately to capitulate before we can see stabilization."

At 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%, at 3,741.10, and the Nasdaq Composite .IXIC was down 207.34 points, or 1.86%, at 10,969.07.

Banks .SPXBK dipped 2% after jumping 4.4% in the previous session.

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

Energy stocks .SPNY were the sole gainer, up 1.5% after OPEC+ agreed its deepest cuts to oil production since the 2020 COVID pandemic, curbing supply in an already tight market.

Twitter Inc TWTR.N lost momentum in line with its peers, a day after surging 22% after billionaire Elon Musk decided to proceed with his original $44-billion bid to take the social media company private.

Tesla Inc TSLA.O , the electric-car maker headed by Musk, slid 6.1%.

Declining issues outnumbered advancers for 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.
Reporting by Ankika Biswas and Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur

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