By Stephen Culp NEW YORK (Reuters) -Wall Street stocks headed lower on Thursday and U.S. benchmark Treasury yields scaled the highest level since April in light, post-Christmas trading. The modest but broad-based sell-off pulled all three major U.

The Dow closed slightly higher on Thursday while the Nasdaq and S&P 500 closed lower in the second day of a so-called Santa Claus rally period.

Dec. 31 window, known as Santa Claus rally, averaging 0.85% return in 64 out of 96 years. 2018 saw strongest rally of 6.6%.

U.S. equity futures moved lower in early Thursday trading, while Treasury bond yields remained elevated in the wake of the Federal Reserve's cautious rate stance, as investors hit pause on the early Santa Claus rally. Stocks are riding firm holiday gains ...

Some of the biggest winners were mega-cap tech stocks, with Tesla up by 6% while Broadcom, Netflix, and Amazon each gained about 2%.

The Santa Claus rally refers to a seasonal tendency for the S&P 500 to rise over the last five days trading days of a calendar year and the first two of the new year. U.S. stocks pared early losses on Thursday, with the Dow wavering in and out of positive territory in recent trade.

Wall Street is eager for a so-called Santa Claus rally to propel the S&P 500—up about 25% this year through Monday's close—to new highs. According to Wall Street lore, the stock market consistently rises during the final five trading days of the year and the first two sessions of the next. This year, that stretch starts today.

According to the latest Labor Department data, weekly jobless claims fell to 219,000 compared with expectations of 223,000. However continuing claims pointed to a cooling labor market, jumping by 46,000 in the week ending Dec. 14 to 1.91 million, the highest level since November 2021.

While overall trading volumes were light on Monday, stocks did gain a little ground as we head into the final trading days of the year.

The article examines the performance of U.S. stock markets, focusing on the Santa Claus rally phenomenon. It discusses the impact of 10-year Treasury yields, megacap stock valuations, and a notable lawsuit against the Federal Reserve over its annual stress tests.