Wall St falls after jobs data, concerns over higher Treasury yields remain

Oct 5 (Reuters) – Wall Street’s major indexes fell on Thursday as the latest data pointed to yet tighter labor market conditions, while U.S. Treasury yields remained at record highs.

While long-dated Treasury yields eased from 16-year highs on Wednesday, investors worried that higher levels could continue to pressure equity markets.

Concerns about U.S. government spending and its ballooning budget deficit have added to uncertainty around the interest rate path, contributing to a steep selloff that has put a dent in Treasury prices.

“It’s not just the movement of inflation and oil prices that real yields are moving higher… the market is asking for a higher premium to invest in long-dated Treasuries,” said Charles-Henri Monchau, chief investment officer at Syz Group.

Lower crude oil prices weighed on energy stocks ( .SPNY ), which fell 0.8%, while the utilities sector ( .SPLRCU ), often considered a bond proxy, fell 1.3%.

Healthcare stocks ( .SPXHC ) rose 0.6% and were the least affected of the major S&P 500 sectors.

The Labor Department reported that the number of Americans filing new claims for unemployment benefits rose modestly last week, while layoffs fell in September, pointing to more resilient labor market conditions.

Following a mixed jobs report earlier this week, Friday will focus on more comprehensive September nonfarm payrolls data.

At 9:45 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 62.18 points, or 0.19%, at 33,067.37 and the S&P 500 (.SPX) was down 11.04 points, or 0.26%, at 41,252. Composite (.IXIC) was down 35.03 points, or 0.26%, at 13,200.98.

According to CME’s FedWatch tool, traders are placing an 80% and 63% chance of interest rates remaining unchanged in November and December, respectively.

Federal Reserve policymakers scheduled to speak during the day include Neil Kashkari of Minneapolis, Thomas Parkin of Richmond, Mary Daly of San Francisco and Vice Chairman for Supervision Michael Barr.

The race to replace ousted House Speaker Kevin McCarthy on Wednesday in the chamber’s no. 2 Republican Steve Scalise and Democratic President Joe Biden’s leading opponent, Jim Jordan, have said they want the position.

In stocks, Clorox ( CLX.N ) fell 6.2% as the cleaning products maker expected to post a first-quarter loss.

Rivian Automotive ( RIVN.O ) fell 15.7% after the EV maker said it planned to sell $1.5 billion worth of convertible green bonds and forecast quarterly earnings to rise in line with estimates.

VinFast gained 4% after the Vietnamese EV maker reported a doubling of third-quarter revenue.

Dell Technologies ( DELL.N ) expects compound annual revenue growth of 3% to 4% over the long term. Shares of the PC maker fell 1.2%.

Lamb Weston Holdings ( LW.N ) rose 11% after the frozen potato products supplier raised its annual profit and sales forecast.

Declining issues outnumbered advancers by a 1.50-to-1 ratio on the NYSE and 1.22-to-1 on the Nasdaq.

The S&P index posted three new 52-week highs and 12 new lows, while the Nasdaq posted 15 new highs and 106 new lows.

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