US STOCKS-Wall St drops as tech stocks hit by spike in yields

  • Reuters
  • Stock Market News
US STOCKS-Wall St drops as tech stocks hit by spike in yields
Credit: © Reuters.

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* Tech stocks fall as 10-year yields touch 14-month high

* Banks, industrial stocks gain

* Indexes down: Dow 0.34%, S&P 0.53%, Nasdaq 0.82% (Adds comment, details; updates prices)

By Devik Jain and Medha Singh

March 30 (Reuters) - Wall Street's main indexes slipped on Tuesday as investors pulled out of heavyweight tech-related stocks and flocked to undervalued banks and industrial stocks amid a rise in U.S. bond yields.

Apple Inc AAPL.O , Microsoft Corp MSFT.O , AMZN.O and Broadcom Inc AVGO.O dropped between 0.9% and 2.7%, as U.S. 10-year Treasury yield US10YT=RR hit a 14-month high. US/

The Nasdaq .IXIC is set for its first monthly loss since November as a rise in yields since last month has particularly hit tech stocks which often have a low-rate environment heavily baked into their high valuations.

The index is still about 7% below its all-time closing high, while bets on a speedy economic recovery driven by vaccine distributions and unprecedented stimulus has helped the S&P 500 and the Dow notch record closing highs last week.

"We are going through a period where people are adjusting to slightly higher rates," said Jon Maier, chief investment officer at Global X ETFs in New York.

"An infrastructure plan would benefit the sectors that were typically locked during the pandemic. Materials, industrials are the areas that would benefit from additional spending."

On Wednesday, President Joe Biden will unveil more details about the first stage of his infrastructure plan, which could be worth as much as $4 trillion. financials .SPSY and industrials .SPLRCI were the only sectors in positive territory, while technology .SPLRCT and utilities .SPLRCU posted the steepest declines.

Bank stocks .SPXBK rebounded 1.7% as investors took heart from signs that the impact from the fall of a U.S. hedge fund didn't ripple out to broader markets.

"It's a transitional market ... we would see this broadening of the market continue throughout this year," said John Traynor, chief investment officer at People's United Advisors.

At 10:07 a.m. ET, the Dow Jones Industrial Average .DJI fell 111.33 points, or 0.34% , to 33,060.04, the S&P 500 .SPX lost 20.71 points, or 0.53%, to 3,949.97 and the Nasdaq Composite .IXIC lost 107.32 points, or 0.82%, to 12,952.33.

Banks and industrial stocks including JPMorgan Chase & Co (NYSE: JPM ) JPM.N , Morgan Stanley (NYSE: MS ) MS.N and Boeing (NYSE: BA ) Co BA.N added between 0.2% and 0.7%.

Bitcoin prices BTC=BTSP gained about 2.6% after Reuters reported that PayPal Holdings Inc PYPL.O is set to announce that it has started allowing U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally. gained about 1%.

Declining issues outnumbered advancers by a 1.2-to-1 ratio on the NYSE and by a 1.6-to-1 ratio on the Nasdaq.

The S&P 500 posted 17 new 52-week highs and no new low, while the Nasdaq recorded 33 new highs and 61 new lows.

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