US STOCKS-Dow notches fifth straight record high

* Ulta Beauty slumps as revenue forecast disappoints
* Benchmark 10-year bond yield hits one-year high
* The Nasdaq and S&P 500 post best week in five

(Adds 4 p.m. close)
By Herbert Lash
NEW YORK, March 12 (Reuters) - The blue-chip Dow powered to
its fifth consecutive record high on Friday as investors bought
shares that should benefit from a strong reopening of the U.S.
economy, an outlook signaled by rising yields in the bond
market.
The tech-heavy Nasdaq tumbled after rebounding more than 6%
over the past three sessions and the S&P 500 closed flat after
hitting an all-time high the prior session as rising Treasury
yields revived inflation concerns.
The Nasdaq and S&P 500 posted their best week in five after
President Joe Biden signed into law on Thursday one of the
largest U.S. fiscal stimulus bills and data reinforced
convictions the economy was headed to a high-growth recovery.
The recent rise in U.S. Treasury yields has raised fears of
a sudden tapering of monetary stimulus and put downward
pressure on Wall Street in recent weeks.
The yield on the benchmark 10-year note US10YT=RR hit
1.642% on Friday, the highest level since February of last year.
US/
The rising Dow and tumbling Nasdaq reflect an ongoing
sell-off in tech as investors buy cyclical and underpriced value
stocks that are expected to do well as the economy recovers.
For tech stocks to continue to flourish you need low rates,
and in effect slower growth, said Thomas Hayes, chairman and
managing member of hedge fund Great Hill Capital LLC.
But with the stimulus package the economy is likely to
expand 7% to 9% this year and pressure interest rates, he said.
"That's why you're seeing rates rise today because the
reopening is happening faster and stronger than anticipated. And
that's when value and cyclicals and economically sensitive
stocks outperform," Hayes said.
The speedy distribution of vaccines and more fiscal aid have
spurred concerns of rising inflation despite assurances from the
Federal Reserve to maintain an accommodative policy. All eyes
will be on the central bank's policy meeting next week for
further cues on inflation.
U.S. consumer sentiment improved in early March to its
strongest in a year, a survey by the University of Michigan
showed on Friday. Unofficially, the Dow Jones Industrial Average .DJI rose
291.74 points, or 0.9%, to 32,777.33, the S&P 500 .SPX gained
3.98 points, or 0.10%, to 3,943.32 and the Nasdaq Composite
.IXIC dropped 78.81 points, or 0.59%, to 13,319.87.
The Nasdaq has been particularly hit by the sell-off in
recent weeks and confirmed a correction at the start of the week
as investors swapped richly valued technology stocks with those
of energy, mining and industrial companies that are poised to
benefit more from an economic rebound.
Value stocks .RLV rose while growth stocks .RLG slumped
in a continuation of a rotation that began late last year.
The high-flying but yield-sensitive group of stocks
including of Facebook Inc FB.O , Apple Inc AAPL.O , Amazon.com
Inc AMZN.O , Netflix Inc NFLX.O , Google-parent Alphabet Inc
GOOGL.O , Tesla Inc TSLA.O and Microsoft Corp MSFT.O , which
fueled the past's year rally, fell.
Tech .SPLRCT , communication services .SPLRCL and
consumer discretionary .SPLRCD indexes, which house these
mega-cap stocks, slipped the most among major S&P sectors.
The bank index .SPXBK jumped, while financials .SPSY and
industrials .SPLRCI clinched new record levels.
Ulta Beauty Inc ULTA.O fell after the cosmetics retailer
forecast annual revenue below estimates, as demand for make-up
products were under pressure due to extended work-from-home
policies. U.S.-listed shares of China-based JD.com Inc JD.O slid
after three sources said it is in talks to buy part or all of a
stake in brokerage Sinolink Securities worth at least $1.5
billion. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Fund flows into U.S. based growth and value funds https://tmsnrt.rs/3rKmhn2
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