Stocks sink as tech firms fall

U.S. stocks fell Tuesday and a seven-day surge in technology shares ended after President Trump, citing national security, blocked Singapore-based chipmaker Broadcom’s effort to buy Qualcomm.

The Dow Jones industrial average climbed as much as 197 points early in the day after investors were pleased with a Labor Department report that showed inflation stayed in check last month. But the gains soon faded.

Technology stocks were at record highs after a recent rally. Although Qualcomm had rejected all of Broadcom’s takeover offers, investors are now wondering if other deals might also be blocked and if companies will hesitate to make bids for overseas competitors.

“I don’t think we’ve started to price in protectionism on a broader level,” said Gina Martin Adams, chief equity strategist for Bloomberg Intelligence.

Qualcomm slid 5% to $59.07. Broadcom rose more than 3% early in the day but then erased that gain, finishing down 0.6% at $261.22.

Also on Tuesday, the government said prices paid by consumers rose 0.2% in February, matching estimates. Excluding food and energy costs, prices have risen 1.8% in the last year. Prices jumped in January. Over the last month investors have worried about the prospect of faster inflation, but Tuesday’s price report and Friday’s monthly jobs report suggest inflation isn’t moving any more rapidly than in the recent past.

With investors expecting slower gains in interest rates, bond yields fell. The yield on the 10-year Treasury note slipped to 2.85% from 2.87%. Faster inflation probably would lead the Federal reserve to raise interest rates more quickly. Investors feared that could slow the economy and the market’s gains.

Lower bond yields mean lower interest rates, and that weighed on bank stocks. Bank of America shares fell 1.5% to $32.36.

Companies considered bond proxies, such as utilities and real estate investment trusts, did better than the rest of the market. They often move in the opposite direction of bond yields because investors seeking income buy those stocks for their big dividend payments.

Benchmark U.S. crude slumped 65 cents, or 1.1%, to $60.71 a barrel. Brent crude fell 31 cents to $64.64 a barrel. Wholesale gasoline fell 1 cent to $1.89 a gallon. Heating oil rose 1 cent to $1.87 a gallon. Natural gas rose 1 cent to $2.79 per 1,000 cubic feet.

Gold rose $6.30 to $1,327.10 an ounce. Silver rose 9 cents to $16.63 an ounce. Copper rose 1 cent to $3.14 a pound.

The dollar rose to 106.61 yen from 106.35 yen. The euro rose to $1.2397 from $1.2336.