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10-yr Treasury yield races above 4%
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Tesla slides after investor day
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Weekly jobless claims fall more than expected
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Futures: Dow up 0.17%, S&P off 0.55%, Nasdaq falls 0.89%
(Adds details on economic data, updates prices)
By Sruthi Shankar and Shristi Achar A
March 2 (Reuters) - The S&P 500 and the Nasdaq were set
to open sharply lower on Thursday as the 10-year Treasury yield
surged above 4% on bets of tighter monetary policy for a longer
period, while Tesla sank after it gave few details on its
affordable electric vehicle.
Futures extended losses after data showed the number of
Americans filing new unemployment claims fell again last week,
pointing to sustained labor-market strength.
Another set of data showed non-farm unit labor costs were revised to 3.2% in the fourth quarter, against economists' estimate of a 1.6% rise. The yield on 10-year Treasury notes - the benchmark for global borrowing costs - raced further above the 4% level on Thursday to touch a fresh four-month high of 4.08%. The two-year yield , which best reflects short-term rate expectations, hit a fresh 15-year high at 4.94%. "It doesn't look like the jobs market is responding to higher rates. The unit labor cost is double the expectations because wages are up and productivity is down, so nothing is really working in favor of markets," said Jack Albin, chief investment officer at Cresset Capital.
After a lackluster performance in February, Wall Street indexes kicked off March on a volatile note as fresh evidence of persistent price pressures and comments from Federal Reserve policymakers fueled worries about the U.S. central bank staying hawkish for longer. The benchmark S&P 500 and the tech-heavy Nasdaq fell on Wednesday after data showed U.S. manufacturing contracted for a fourth straight month in February, although raw material prices increased last month. Traders of futures tied to the Fed's policy rate saw about an even chance that the rate will get to a range of 5.5%-5.75% by September, from the current range of 4.5% to 4.75%. U.S. monthly payrolls and consumer prices data in the coming days will offer investors more clues on the path of rates heading into the Fed's March 21-22 meeting, where it is currently expected to raise rates by 25 basis points. At 8:46 a.m. ET, Dow e-minis were up 56 points, or 0.17%, S&P 500 e-minis were down 21.75 points, or 0.55%, and Nasdaq 100 e-minis were down 107 points, or 0.89%. Tesla Inc fell 7.2% in premarket trading after Chief Executive Elon Musk and team's four-hour presentation failed to impress investors with few details on its plan to unveil an affordable electric vehicle.
Dow-component Salesforce Inc soared 16.1% after the cloud-based software firm forecast first-quarter revenue above analysts' estimates and doubled its share buyback to $20 billion. Meanwhile, Reuters reported that activist investor Elliott Management has nominated candidates to Salesforce's board. Macy's Inc jumped 6.4% after the department store operator forecast full-year profit above Wall Street estimates.
Silvergate Capital slumped 43.9% after the cryptocurrency-focused lender delayed its annual report and said it was evaluating its ability to operate as a going concern. (Reporting by Sruthi Shankar in Bengaluru; Editing by Savio D'Souza and Anil D'Silva)
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