LIVE MARKETS-Yields retreat from 24-year high, lifting US stocks

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YIELDS RETREAT FROM 24-YEAR HIGH, LIFTING US STOCKS

US stocks turned higher on Thursday and eked out minor gains on the day as Treasury yields retreated, reversing an earlier climb that had pushed the benchmark 10-year yield to its highest level in 24 years.

Yields rose early in line with higher oil prices and after the Labor Department said new applications for US unemployment benefits drifted close to 57-year lows last week and layoffs decreased in September. The data comes ahead of Friday’s highly anticipated jobs report for September.

Adding to the pressure, the Institute for Supply Management said its manufacturing PMI showed a jump in input prices, which raised inflation worries.

Yields reversed course as buyers stepped in, helping to lift stocks. Yields fell further after Federal Reserve Vice Chair Philip Jefferson suggested the central bank could be patient before raising rates again, following its 25-basis-point hike in September.

The yield on benchmark US 10-year notes was down 6.08 basis points on the day at 5.234%.

The Dow Jones Industrial Average .DJI and the Nasdaq Composite .IXIC ended up 0.04%, while the S&P 500 .SPX gained 0.2%.

Meanwhile, the S&P 500 tech sector .SPLRCT reached a record closing high.

Fed funds futures now put the odds of a hike at the Fed's October meeting at 26%, down from about 70% earlier this week.

Here is Thursday's closing market snapshot:

(Karen Brettell)

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