Tech losses drive down stocks

U.S. stocks gave up early gains as a selloff in technology shares from Apple to Amazon.com dragged down major indexes. Treasuries dropped after Federal Reserve Chair Janet Yellen called economic growth “increasingly broad based.”

The Nasdaq 100 Index fell as much as 2.2 percent as signs of a rotation from the year’s leaders emerged anew. As tax legislation proceeded through the Senate, the FANG block of megacap tech shares that paced gains throughout the year fell the most in 22 months. All 15 members of the S&P 500 Semiconductor Index retreated, led by Micron Technology, Lam Research Corp. and Applied Materials Inc.

“The large tech companies already have low effective tax rates because they were gaming the system,” Michael O’Rourke, chief market strategist at Jones-Trading Institutional Services LLC, said by phone. “Any reform would have to close the loopholes, which obviously they’re trying to do, so they don’t benefit.”

Stocks started the day higher on speculation the Senate would pass cuts to corporate taxes, with banks pacing gains on bets that industry will benefit most. Yellen’s comments added to optimism that growth is poised to accelerate. The dollar fluctuated, while 10-year Treasury yields rose.

In testimony prepared for her appearance Wednesday before the congressional Joint Economic Committee, Yellen repeated that she anticipates the Fed will continue gradually raising interest rates and trimming its balance sheet. The Fed’s Beige Book economic report said the U.S. economy grew at a modest to moderate pace through mid-November as price pressures strengthened and the labor market tightened.

The Stoxx Europe 600 Index advanced with banks outperforming after Yellen’s proposed replacement, Jerome Powell, signaled that he won’t add to financial regulations.