US STOCKS-Nasdaq slumps as surge in bond yields pressures tech stocks

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* 10-year Treasury yields at highest since Jan 2020
* Weekly jobless claims rise unexpectedly in the latest week
* Value stocks outperform growth names
* Indexes: Dow up 0.5%, S&P down 0.4%, Nasdaq drops 1.4%

(Adds comment, details; updates prices)
By Shashank Nayar and Medha Singh
March 18 (Reuters) - The S&P 500 eased from a record high on
Thursday while the tech-heavy Nasdaq shed more than 1% as a
spike in U.S. bond yields accelerated a move out of pandemic
winner tech stocks and into economy-linked financials and
industrials.
The Russell 1000 value index .RLV , which is heavily
comprised of cyclical stocks such as financials and energy,
added about 0.3% while the Russell 1000 growth index .RLG ,
which includes technology stocks, dropped about 1.3%.
The yield on the benchmark 10-year notes US10YT=RR crossed
1.75% to hit a 14-month high, pressuring high-growth companies
including Apple Inc AAPL.O , Facebook Inc FB.O , Netflix Inc
NFLX.O , Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O
dropped between 1.3% and 2.2%.
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.
The blue-chip Dow, on the other hand, hit another record
high a day after the Fed projected strongest growth in nearly 40
years as the COVID-19 crisis winds down, and repeated its pledge
to keep its target interest rate near zero for years to come.
"Investors are generally confident in the U.S. equity
story.. market has already gone a step ahead and worrying about
inflation," said Chris Zaccarelli, chief investment officer for
Independent Advisor Alliance.
A $1.9 trillion spending stimulus sparked fears of rising
inflation that triggered a jump in longer-end Treasury yields,
accelerating a rotation into value stocks at the cost of
high-growth tech stocks.
Underscoring the staggered recovery in the labor market,
latest data showed the number of American filing for jobless
benefits unexpectedly rose last week. A separate report indicated the Philly Fed business index
jumped more than expected to its highest level since 1973.
At 11:33 a.m. ET, the Dow Jones Industrial Average .DJI
rose 153.17 points, or 0.46%, to 33,168.54, the S&P 500 .SPX
lost 15.76 points, or 0.40%, to 3,958.36 and the Nasdaq
Composite .IXIC lost 185.64 points, or 1.37%, to 13,339.56.
Bank stocks .SPXBK , sensitive to economic outlook, jumped
about 4%, while sectors poised to benefit the most from a
reopening economy including financials .SPSY and industrials
.SPLRCI hovered near all-time highs.
In corporate news, Accenture ACN.N jumped about 1.5% after
the IT consulting firm raised its full-year revenue forecast and
reported second-quarter revenue above analysts' estimates, as
more businesses used its digital services to shift operations to
the cloud. Dollar General Corp DG.N dropped 6% after the company
forecast annual same-store sales and profit below estimates,
indicating the pandemic-fueled rush for lower-priced groceries
was waning faster than expected. The so-called meme stock AMC Entertainment AMC.N rose 1.5%
after the movie theater operator said it would have 98% of its
U.S. locations open from Friday. Declining issues outnumbered advancers by a 1.4-to-1 ratio
on the NYSE and by a 1.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 73 new 52-week highs and no new low,
while the Nasdaq recorded 225 new highs and 50 new lows.