Wall St slides as rising Treasury yields snuff out stock rally By Reuters

By Ankika Biswas and FXCM platform trading app downloadBansari Mayur Kamdar

(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 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. [.N]

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

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 (NASDAQ:NVDA) Corp, Amazon.com (NASDAQ:AMZN), Apple Inc (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL) Inc 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 was down 293.33 points, or 0.97%, at 30,022.99, the S&P 500 was down 49.83 points, or 1.31%, at 3,741.10, and the Nasdaq Composite was down 207.34 points, or 1.86%, at 10,969.07.

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

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

Energy stocks 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 (NYSE:TWTR) 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 (NASDAQ:TSLA) Inc, 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.

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