US STOCKS-Wall St falls after Powell, Treasury auction
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Disney rises on quarterly profit beat
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Arm falls on weak quarterly forecast
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Weak 30-year auction sends yields higher
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Indexes down: Dow down 0.60%, S&P 0.64%, Nasdaq 0.65%
(Updated at 2:21 p.m ET/1941 GMT)
By Chuck Mikolajczak
Nov 9 (Reuters) -
U.S. stocks slipped on Thursday, jeopardizing the longest winning streaks for the Nasdaq and S&P 500 in almost two decades, as Treasury yields rose after a disappointing auction of 30-year bonds and comments from Federal Reserve Chair Jerome Powell.
Powell said central bank officials "are not confident" interest rates are high enough to tame inflation, and may not get much more help from improvements in the supply of goods, services and labor.
Stocks had moved slightly lower prior to Powell's comments as yields climbed after a weak auction of $24 billion in 30-year Treasuries with demand for the debt at 2.24 times the bonds on sale. The benchmark 10-year Treasury note yield was last up nearly 12 basis points at 4.626% on the day.
Powell is "taking a hawkish viewpoint again," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "He's reassuring the market that the fight against inflation has not been won a and if economic conditions warrant, they won't hesitate to hike rates again," he said.
"If you add up all the remarks, Powell is telling the market not to get too complacent and that’s putting some pressure on stocks."
The Dow Jones Industrial Average fell 203.81 points, or 0.60% , to 33,905.72, the S&P 500 lost 28.02 points, or 0.64 %, to 4,354.76 and the Nasdaq Composite lost 89.39 points, or 0.65 %, to 13,561.02.
Equities have rallied on softening economic data, including the monthly payrolls report, and as U.S. Treasury yields retreated from multi-year highs on the view that the Fed's most recent policy meeting signaled the central bank was done with its rate hike cycle.
After Wall Street's strong rally last week, the pace of gains slowed, although the S&P 500 index on Wednesday managed to extend its winning streak to an eighth straight session while the Nasdaq scored its ninth straight session of gains, the longest for each in two years.
If the benchmark S&P index could end higher on Thursday, it would be its longest streak of gains since 2004.
Most traders are betting the Fed will keep interest rates unchanged this year, even after Powell's comments, although odds of a cut of at least 25 basis points in May dipped below 40%, after his comments, according to the CME Group's FedWatch Tool.
Several policymakers had already
struck a hawkish tone
this week to deter rate cut expectations, with some stressing on a data-dependent approach to policy.
Meanwhile, a Labor Department report showed jobless claims edged lower last week to 217,000, indicating layoffs have yet to accelerate despite signs of a cooling labor market.
Among major movers,
Nvidia
shares rose 2.9% as local media reported the chip designer is planning to release three new chips for China.
Walt Disney jumped 6.9% on a quarterly profit beat and as Hollywood actors reached a tentative agreement with major studios.
Nearly all 11 major S&P sectors were lower, led by declines in healthcare And consumer discreationary with declines of nearly 2% each.
Among other stocks, semiconductor firm Arm Holdings dropped 5% on a downbeat third-quarter sales forecast.
Declining issues outnumbered advancers by a 2.3-to-1 ratio on the NYSE while on the Nasdaq declining issues outnumbered advancers by a 2.4-to-1 ratio.
The S&P 500 posted 18 new 52-week highs and 8 new lows while the Nasdaq recorded 44 new highs and 259 new lows. (Reporting by Chuck Mikolajczak, additional reporting by Stephen Culp; Editing by David Gregorio)