US STOCKS-Nasdaq slumps as bond yield surge hurts tech valuations

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.)

* 10-year Treasury yields reach highest level since Jan 2020

* Weekly jobless claims rise unexpectedly in the latest week

* Value stocks outperform growth names

* Indexes: Dow +0.49%, S&P 500 -0.37%, Nasdaq -1.46%

(Updates with afternoon trading)

By Noel Randewich

March 18 (Reuters) - The S&P 500 receded from a record high on Thursday while the Nasdaq shed more than 1% as a spike in U.S. bond yields accelerated a move out of growth stocks and into companies viewed as likely to outperform as the economy recovers.

The Russell 1000 value index .RLV , which is heavily comprised of cyclical stocks such as financials and energy, added about 0.2% while the Russell 1000 growth index .RLG , which includes technology stocks, dropped about 1.4%.

That rotation helped lift the Dow Jones Industrial Average to an intraday record high, led by UnitedHealth (NYSE: UNH ) Group UNH.N and Goldman Sachs (NYSE: GS ) Group GS.N , both up more than 2%.

The yield on the benchmark 10-year Treasuries US10YT=RR crossed 1.75% to hit a 14-month high a day after the Fed projected the strongest growth in nearly 40 years as the COVID-19 crisis winds down, and also repeated its pledge to keep its target interest rate near zero for years to come. Fed just saying they are not going to raise rates until 2023 really means nothing," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "The Fed is on the sidelines, but if bond yields keep going up, that is what really hurts the economy."

Apple Inc AAPL.O and Amazon.com Inc AMZN.O dropped more than 2%. Tech and other growth stocks are particularly sensitive to rising yields because their value rests heavily on earnings far into the future, which are discounted more deeply when bond yields rise.

A recent $1.9 trillion spending stimulus sparked fears of rising inflation and contributed to the jump in longer-end Treasury yields.

Underscoring the staggered recovery in the labor market, data showed the number of Americans filing for jobless benefits unexpectedly rose last week. separate report indicated the Philly Fed business index jumped more than expected, to its highest level since 1973.

In midafternoon trading on Thursday, the Dow Jones Industrial Average .DJI was up 0.49% at 33,176.67 points, while the S&P 500 .SPX lost 0.37% to 3,959.43.

The Nasdaq Composite .IXIC dropped 1.46% to 13,328.11.

The S&P 500 financial sector index .SPSY , sensitive to the economic outlook, rose almost 2%, while the industrial index .SPLRCI climbed almost 1%. The technology index .SPLRCT fell 2.3%.

Accenture (NYSE: ACN ) ACN.N jumped about 1.9% 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. General Corp DG.N dropped more than 5% after the retailer forecast annual same-store sales and profit below estimates, indicating that a pandemic-fueled rush for lower-priced goods may be waning faster than expected. Entertainment AMC.N jumped almost 5% after the movie theater operator said it would have 98% of its U.S. locations open from Friday. issues outnumbered advancing ones on the NYSE by a 1.69-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored decliners.

The S&P 500 posted 84 new 52-week highs and no new lows; the Nasdaq Composite recorded 208 new highs and 20 new lows.