Tuesday’s early trade: Main indexes drop as tech stocks hit by spike in yields

NEW YORK: 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 spooked by a new high in US bond yields.

Apple Inc, Microsoft Corp, Amazon.com and Broadcom Inc dropped between 0.9% and 2.7%, with US 10-year Treasury yield hitting a 14-month high.

The Nasdaq is set for its first monthly loss since November following a recent rise in yields that particularly hurt tech stocks, which often have a low-rate environment heavily baked into their high valuations.

Bets on a swift economic rebound backed by vaccine rollouts and unprecedented stimulus has helped the S&P 500 and the Dow notch record closing highs last week, while the Nasdaq is still about 7% below its all-time closing high from February.

Despite market weakness, economy-linked industrials stocks hit a new peak while financials and materials traded higher. The small-cap Russell 2000 added 1.4%. Eight of the 11 major S&P sectors were in the red.

At 11:29 a.m. ET, the Dow Jones Industrial Average fell 86.61 points, or 0.26%, to 33,084.76, the S&P 500 lost 12.35 points, or 0.31%, to 3,958.74 and the Nasdaq Composite lost 28.43 points, or 0.22%, to 13,031.22.