Nasdaq drops as tech stocks falter

The Nasdaq Composite Index fell the most in three weeks as technology stocks faltered while defensive shares advanced as volatility returned to U.S. equity markets. Treasuries held gains and gold climbed.

The S&P 500 Index wiped out a slide of 0.5 percent to close slightly higher, setting a new record even as the Nasdaq slumped 0.4 percent, with Apple Inc. pacing declines after a report that the iPhone maker was dialing back orders. The Cboe Volatility Index held above 10, but trimmed a jump of more than 15 percent. Tenyear Treasury yields fell to 2.32 percent and gold approached $1,290 per ounce.

American traders awoke to find the S&P 500 headed for its biggest drop since August as a host of negative headlines snapped a riskon sentiment that had dominated in recent days. Investors sought the safest assets, from the Swiss franc to gold, amid concern over politics in New Zealand and Spain, a sharp drop in Hong Kong shares and the bad news from Apple. That sentiment faded as the U.S. day wore on, amid the prospect for higher corporate earnings and data showing firmness in the American labor market.

The S&P 500 Index rose less than 0.1 percent at the close in New York. United Continental Holdings Inc. fell the most in eight years after the airline’s profit outlook disappointed investors.

EBay Inc. fell the most in two months after giving a lackluster profit forecast for the holiday quarter. The Stoxx Europe 600 Index dropped 0.6 percent, and the MSCI Asia Pacific Index dipped 0.2 percent.