A late slide, led by Big Tech, leaves stocks lower

Damian J. Troise and Alex Veiga

NEW YORK — A late-afternoon burst of selling on Wall Street erased an early gain for stocks Wednesday, pulling the market further below the all-time high it reached just a week ago.

The S&P 500 dropped 0.5% after having been up 0.8% in the early going. Technology and communication services companies accounted for the heaviest selling, outweighing gains in financial, energy and industrial stocks. .

“The markets are kind of choppy and sideways and everything is sort of trying to figure out who’s in charge, where’s the equilibrium — and it creates uncertainty,” said Randy Frederick with Charles Schwab. “When people don’t know what to do, they either do nothing or they sell. They very rarely buy.”

The S&P 500 fell 21.38 points to 3,889.14. The benchmark index is on track for its second straight weekly decline. The Dow Jones Industrial Average slipped 3.09 points, or less than 0.1%, to 32,420.06, after a 364-point gain vanished by late afternoon. The Nasdaq slid 265.81 points, or 2%, to 12,961.89. Smaller company stocks fared worse than the broader market. The Russell 2000 index lost 51.42 points, or 2.4%, to 2,134.27.

Investors had their eye on Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen who told the Senate about the government’s efforts to combat the economic impact of the coronavirus pandemic. The Biden administration is considering up to $3 trillion in more spending on infrastructure, green energy, and education.

Yellen believes the government has room to borrow, but said higher taxes would likely be required in the long run to finance future spending increases. Meanwhile, Powell reiterated that the recent jump in the yield on the 10-year Treasury, which soared from less than 1% at the beginning of the year to 1.62% Wednesday, was mostly a sign of confidence among investors that the economy is improving.