Weaker tech stocks lead Wall Street mostly lower

A sell-off in technology companies led stocks on Wall Street mostly lower Monday, adding to the market’s losses from last week.

The S&P 500 fell 0.8%, extending its losses to a fifth straight day. The benchmark index was just about evenly split between winners and losers, but technology stocks and companies that rely on consumer spending bore the brunt of the selling. Apple fell 3%, Microsoft dropped 2.7%, Tesla slumped 8.5% and Amazon lost 2.1%.

The tech-heavy Nasdaq composite slid 2.5%, while the Dow Jones Industrial Average eked out a tiny gain, as solid gains by companies like Disney, Exxon Mobil and Chevron helped offset the drag by some of the Big Tech companies.

Stocks began shedding some of their gains last week after a strong start to February as rising interest rates and the potential for inflation down the road dampened some of Wall Street’s enthusiasm, though the major stock indexes remain near their all-time highs.

“Equity investors are finally paying attention to the bond market,” said Mike Zigmont, director of trading and research at Harvest Volatility Management. “With yields climbing, there are a lot of jitters in the equity space.”

The S&P 500 fell 30.21 points to 3,876.50. The Dow gained 27.37 points, or 0.1%, to 31,521.69. The Nasdaq lost 341.42 points to 13,533.05. The Russell 2000 index of smaller companies gave up 15.62 points, or 0.7%, to 2,251.07.

Investors remain focused on the future of global economies badly hit by covid-19 and the potential for more stimulus to aid them. The U.S. House of Representatives is likely to vote on President Joe Biden’s proposed stimulus package by the end of the week. It would include $1,400 checks to most Americans, additional payments for children, and billions of dollars in aid to state and local governments as well as additional aid to businesses affected by the pandemic.

But the large amount of stimulus being pumped into the economy has given some investors pause as worries of inflation have re-entered the market after being nonexistent for more than a decade. Yields on U.S. Treasury bonds and notes have risen in the last several weeks as investors have predicted more inflation would come with the economic recovery.

“There are some risks out there,” said Gary Schlossberg, global strategist at Wells Fargo Investment Institute. “The issue is are we just normalizing back to where we were before the pandemic or are we talking about a sea change.”

The yield on the 10-year Treasury rose to 1.36% from 1.34% late Friday and has been rising steadily since the beginning of the year. The higher yields have helped lift banks, which rely on higher yields to charge more lucrative interest rates on loans. Morgan Stanley rose 1.8%.

Technology stocks accounted for the biggest share of the selling. The sector, which powered much of the market’s gains in 2020, posted its fifth straight loss.

Tech stocks have enjoyed big gains throughout the pandemic, as investors bet that consumers spending more time at home would increasingly rely on mobile devices and other technology products and services. But as the number of new coronavirus cases has declined recently after a sharp spike late last year and more people get vaccinated, investors are beginning to snap up stocks in areas of the market that are expected to do better in a post-pandemic economy.

Airlines, which have been battered by the virus pandemic, rose after Deutsche Bank upgraded its view on the sector and the potential for recovery as covid-19 cases fall and vaccination rates increase. American Airlines jumped 9.4%, while Delta rose 4.5% and United Airlines gained 3.5%.

In this photo provided by the New York Stock Exchange, traders work on the floor, Monday Feb. 22, 2021. Investors remain focused on the future of global economies badly hit by COVID-19 and the potential for more stimulus to fix them. (Courtney Crow/New York Stock Exchange via AP)

In this photo provided by the New York Stock Exchange, trader Neil Catania works on the floor, Monday Feb. 22, 2021. Investors remain focused on the future of global economies badly hit by COVID-19 and the potential for more stimulus to fix them. (Courtney Crow/New York Stock Exchange via AP)