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Weekly jobless claims at 219,000, below estimates

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Crypto stocks fall tracking losses in bitcoin

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Yield on U.S. 10-year Treasuries hits highest since May

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Indexes: Dow up 0.07%, S&P 500 down 0.04%, Nasdaq off

0.05%

(Adds closing prices)

By David French

Dec 26 (Reuters) - The Dow Jones Industrial Average

closed fractionally higher on Thursday, stretching its

winning streak to five sessions despite light trading volumes

and rising U.S. Treasury yields weighing on some of the dominant

technology megacaps.

While the Nasdaq Composite and the S&P 500

were broadly unchanged, the indexes both finished slightly in

negative territory. This snapped the Nasdaq's four-session run

of higher closes, and ended the S&P 500's own run at three

sessions.

On a day of few catalysts, investors responded to yields on

U.S. government bonds inching higher, including the yield on the

benchmark 10-year Treasury note hitting its highest

since early May at 4.64% earlier in the session.

A strong auction of seven-year notes early in the afternoon

though helped yields come off slightly, with the 10-year note at

4.58% in late-afternoon trade.

Higher yields are traditionally seen as negative for growth

stocks, as it raises the cost of their borrowing to fund

expansion. With markets increasingly dominated by the megacap

technology stocks known as the Magnificent Seven, crimping their

performance - especially in lieu of other market catalysts -

will put downward pressure on benchmark indexes.

The S&P 500 slipped 2.45 points, or 0.04%, to

6,037.59 points, while the Nasdaq Composite lost 10.77

points, or 0.05%, to 20,020.36. The Dow Jones Industrial Average

rose 28.77 points, or 0.07%, to 43,325.80.

Six of the megacaps fell, with Tesla leading

decliners with a 1.8% fall. The outlier was Apple ( AAPL ),

rising 0.3% and continuing to edge closer to becoming the first

company in the world to hit a market value of $4 trillion.

The megacap tech stocks came off somewhat in the summer, as

investors sought to rotate some capital into other sectors

offering more value. Since the U.S. elections in November

though, they have resumed their drive upwards and have

outperformed the equal-weighted version of the S&P 500, said

Adam Turnquist, chief technical strategist for LPL Financial.

"As a technician, what you want to see is breakouts in

absolute terms and relative terms and the Mag 7 is checking the

boxes there, so very constructive leadership going into the

year-end," he said.

The three main indexes have hit multiple record highs

this year on hopes of a lower interest rate environment and the

prospects of artificial intelligence boosting corporate profits.

However, U.S. stocks have hit a speed bump in the final

month of the year following an election-led rally in November as

investors assess the Federal Reserve's projection of fewer

interest rate cuts in 2025.

Looking ahead, LPL Financial's Turnquist said the last few

weeks have seen significant reliance on the Magnificent Seven

stocks driving markets higher, and we may be starting to see the

cracks in this momentum. Therefore, to see further benchmark

index increases, we will need to see input from other sectors of

the economy.

One data release on Thursday showed the number of Americans

filing new applications for jobless benefits dipped to the

lowest in a month last week, consistent with a cooling but still

healthy U.S. labor market.

Markets are in a seasonally strong period - called the

"Santa Claus rally" - a pattern attributed to low liquidity,

tax-loss harvesting and investing of year-end bonuses.

The S&P 500 has gained an average of 1.3% in the last five

trading days of December and the first two days of January since

1969, according to the Stock Trader's Almanac.

Cryptocurrency-related stocks were down after Bitcoin

declined 3.9%. MicroStrategy ( MSTR ), MARA Holdings ( MARA )

and Coinbase Global ( COIN ) all fell between 1.9% and 4.8%.

Among the 11 S&P sectors which traded lower were consumer

discretionary, off 0.6%, and the energy index,

which slipped 0.1% as it tracked marginal weakness in U.S. crude

prices.

(Reporting by Medha Singh and Purvi Agarwal in Bengaluru and

David French in New York; Editing by Anil D'Silva and Aurora

Ellis)