Stocks close higher as the 2-year Treasury yield drops 10 basis points to 4.78%; Accenture jumps 16%

Stocks finished the first trading day of October slightly higher after a turn in the bond market. The S&P 500 gained 14.91 points, or 0.19%, to 7,666.45, CNBC reported, ending a three-day losing streak. The Nasdaq Composite and the Dow Jones Industrial Average each rose 0.04%, and the Russell 2000 added 0.35%.

The bond market flipped

The 10-year Treasury yield hit an intraday high of about 5.34% in the morning, its highest since 2002, per CNBC, before reversing. Treasury's official curve has the 10-year closing at 5.24%, down 5 basis points, and the 30-year at 5.61%, down 3. The 2-year fell 10 basis points to 4.78%.

That split is the part that matters for borrowing costs. The 2-year tracks where traders think the Fed is going, and it fell as they priced out an October hike. Fed Vice Chair Philip Jefferson said deciding the next move "may take more time" (our story). A business credit line priced off prime follows that end of the curve. Fixed-rate loans and mortgages follow the 10-year, which barely moved and is still above 5.2%. Freddie Mac's weekly survey, released the same morning, put the 30-year mortgage at 7.28%. The gap between the 10-year and 2-year widened to 0.46 point from 0.41 point on Wednesday (chart: 10-year T-note).

Data, oil and movers

Initial jobless claims fell 1,000 to 197,000, below the 200,000 forecast. The ISM manufacturing index came in at 54.5, but its prices gauge jumped 6.8 points to 77.9 (our ISM story). WTI crude settled up 2.7% at $92.87 after a report that the U.S. is sending a third aircraft carrier to the Middle East (our oil story).

Energy led the sector funds, up 1.95% by Yahoo Finance closing data, followed by technology at 1.05% and industrials at 0.99%. Health care fell 1.32% and communication services 0.93%. Accenture closed up 15.8% after fiscal fourth-quarter revenue of $18.7 billion beat its own guidance (our story). Fair Isaac rose 11.7% after FHFA Director Bill Pulte backed its new mortgage score licensing program. McKesson gained 5.3% and Micron 3.0%, while McCormick fell 4.9% despite beating estimates and Alphabet lost 1.7%.

What comes next

The September jobs report is due Friday morning. Our calendar has a forecast of 90,000 payrolls, against 162,000 previously, with unemployment expected to hold at 4.1%. A weak number would add to the case for a Fed hold, and the 2-year would show it first.

Sources: CNBC, U.S. Treasury, Yahoo Finance, Chronicle markets board. Sector moves use SPDR sector fund closes. This is market information, not investment advice.