Big Tech Losses Drag Wall Street Down Lower

Stocks closed mostly lower on Wall Street Monday, dragged down by losses in several Big Tech companies. The S&P 500 gave up 0.8%, its fifth straight decline. The tech-heavy Nasdaq lost 2.5%, while the Dow Jones Industrial Average eked out a gain of just under 0.1%. Traders are still keeping a close eye on Washington and the next big round of stimulus that’s making its way through Congress. Concerns that inflation could come back have helped send Treasury yields to their highest level in a year. The yield on the 10-year Treasury nudged up to 1.35% and crude oil prices jumped another 3.8%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Stocks mostly fell in afternoon trading on Monday, adding to the declines that started last week as investors continue to be concerned about rising interest rates and the potential for inflation down the road.

The S&P 500 was down 0.3% as of 2:57 p.m. Eastern, pulled down by technology and health care companies which have done well over the past year. The Dow Jones Industrial Average rose 135 points, or 0.4%, to 31,629 after edging lower earlier in trading. The technology-heavy Nasdaq fell 1.6%.

Investors remain focused on the future of global economies badly hit by COVID-19 and the potential for more stimulus to fix 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 impacted by the pandemic.

But the large amount of stimulus being pumped into the economy has given some investors pause as worries of inflation have reentered 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 throughout the year. The higher yields have helped lift banks, which rely on higher yields to charge more lucrative interest on loans. Morgan Stanley rose 2.1%.

There was a lot of churn within different sectors just behind the broader market losses. The S&P 500 was just about evenly split between winners and losers.

Technology stocks accounted for a big share of the selling. The sector, which powered much of the market’s gains in 2020, is on pace for a fifth straight loss. That pullback helped drag down the Nasdaq, while the Dow, which isn’t as heavily weighted with tech stocks, rose.

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, PCs, video streaming 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.

“They parked in technology as a temporary place for their capital while the pandemic raged, and now they’re looking to go back to their pre-COVID asset allocation,” said Mike Zigmont, director of trading and research at Harvest Volatility Management.

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 10.9%, while both Delta and United Airlines rose more than 5%.

Traders continued to bid up shares in energy companies, which are getting a boost from higher energy prices. The sector have risen four out of the last five days. Exxon Mobil was up 4.2%.

The price of crude U.S. crude oil rose 3.8% to $61.49 a barrel. It’s now up 27% for the year.

Brent crude, the international standard, rose 3.7% to $65.24 a barrel, and is up 26% this year. Goldman Sachs predicted in a research note that the price of Brent crude would reach $70 by the second quarter.