US stocks turn mixed as bond yields continue their climb

Stocks were mixed in late morning trading Friday as investors balanced news that hiring by U.S. employers picked up last month at the fastest pace since October with another unsettling rise in bond yields.

The S&P 500 was little changed as of 10:50 a.m. Eastern after moving between modest gains and losses. The benchmark index is back in the red for the year and on track for its third consecutive weekly loss.

The Dow Jones Industrial Average was also little changed at the technology-heavy Nasdaq was down 1.4%.

U.S. employers added a robust 379,000 jobs last month, a sign that the economy is strengthening as confirmed virus cases drop, consumers spend more and states and cities ease business restrictions.

The February gain marked a sharp pickup from the 166,000 jobs that were added in January and the loss of 306,000 in December. Yet it represents just a fraction of the roughly 9.6 million jobs that the economy needs to regain to return to pre-pandemic levels.

The bond market, which has been betting on stronger economic growth as well as the potential for higher inflation, pushed bond yields higher. The yield on the 10-year Treasury note was trading at 1.60%, its highest level in more than a year. Only a week ago, markets reacted negatively to the 10-year note crossing the 1.50% mark.

Technology stocks continued their slow march downward as bond yields rise. Tech stocks tend to be more expensive than other stocks per dollar of earnings a company can generate, a concept known as the price-to-earnings ratio. Because tech stocks are pricier, they tend to fall when bond yields become more attractive.

Apple fell 1%, Amazon lost 1.7% and Tesla fell 8%.

Investors were disappointed with remarks by Federal Reserve Chair Jerome Powell on Thursday. Powell said inflation will likely pick up in the coming months, though he cautioned that the increase would be temporary and would not be enough for the Fed to alter its low-interest rate policies.