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Steep losses in technology shares dragged down the S&P 500 on Monday as a continuous rise in bond yields dented the appetite for growth stocks. Meanwhile, investors piled into economically sensitive names to bet on a comeback.
The Dow Jones Industrials, however, progressed 27.37 points to 31,521.69. A handful of economic comeback plays boosted the blue-chip benchmark. Disney jumped 4.4%, while industrial giant Caterpillar and chemicals company Dow Inc. both climbed more than 3.5%.
American Express tallied 3.2%, and Chevron gained 2.7%.
The S&P 500 dropped 30.21 points to 3,876.50, falling for a fifth straight session amid the weakness in tech and consumer discretionary.
The NASDAQ Composite sank like a stone, losing 341.41 points, or 2.5%, to 13,533.05, as Tesla shares slid 8.6%. Big tech stocks came under pressure with Apple, Amazon and Microsoft all dropping at least 2%.
Monday’s losses pared the NASDAQ’s February gains to 3.5%. The S&P 500 is up 4.4% this month, while the Dow has gained 5.1%.
All eyes will be on Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday. His comments on rates and inflation could determine the market direction for the week.
On Monday, European Central Bank President Christine Lagarde said in a speech that the central bank is "closely monitoring the evolution of long-term nominal bond yields." European sovereign bonds yields moved lower in response to her remarks.
On the pandemic front, the White House said that it expects to ship out millions of delayed coronavirus vaccine doses this week after a sweeping winter storm disrupted logistics. Gov. Andrew Cuomo said on Sunday that a New York resident has tested positive for the COVID-19 variant first identified in South Africa.
Some equity investors grew concerned about rapidly rising Treasury yields in recent weeks as they could especially hurt high-growth companies reliant on easy borrowing while diminishing the relative appeal of stocks.
Prices for 10-Year Treasurys lost some ground, raising yields to 1.36% from Friday’s 1.34%. Treasury prices and yields move in opposite directions.
Oil prices gained $2.45 to $61.69 U.S. a barrel.
Gold prices raced ahead $30.20 to $1,807.60
