Los Angeles Times

Big Tech drags stocks mostly lower

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A sell-off in tech­nol­ogy com­pa­nies led stocks on Wall Street mostly lower Mon­day, adding to the mar­ket’s losses from last week.

The Stan­dard & Poor’s 500 fell 0.8%, ex­tend­ing its losses to a fifth straight ses­sion. The bench­mark in­dex was just about evenly split be­tween win­ners and losers, but tech­nol­ogy stocks and com­pa­nies that rely on con­sumer spend­ing bore the brunt of the sell­ing. Ap­ple fell 3%, Mi­crosoft dropped 2.7%, Tesla slumped 8.5% and Ama­zon lost 2.1%.

The tech-heavy Nas­daq com­pos­ite slid 2.5%, while the Dow Jones in­dus­trial av­er­age eked out a tiny gain, as solid gains by com­pa­nies such as Dis­ney, Exxon Mo­bil and Chevron helped off­set the drag by some of the Big Tech com­pa­nies.

Stocks be­gan shed­ding some of their gains last week after a strong start to Fe­bru­ary as ris­ing in­ter­est rates and the po­ten­tial for in­fla­tion damped some of Wall Street’s en­thu­si­asm, though the ma­jor stock in­dexes re­main near their all-time highs.

The S&P 500 fell 30.21 points to 3,876.50. The Dow gained 27.37 points, or 0.1%, to 31,521.69. The Nas­daq lost 341.41 points to 13,533.05. The Rus­sell 2000 in­dex of smaller com­pa­nies gave up 15.62 points, or 0.7%, to 2,251.07.

In­vestors re­main fo­cused on the fu­ture of global economies badly hit by COVID-19 and the po­ten­tial for more stim­u­lus to fix them. The U.S. House of Rep­re­sen­ta­tives is likely to vote on Pres­i­dent Bi­den’s pro­posed $1.9-tril­lion stim­u­lus pack­age by the end of the week. It would in­clude $1,400 checks to most Amer­i­cans, ad­di­tional pay­ments for chil­dren, and bil­lions of dol­lars in aid to state and lo­cal gov­ern­ments as well as ad­di­tional aid to businesses af­fected by the pan­demic.

But the large amount of stim­u­lus be­ing pumped into the econ­omy has given some in­vestors pause as wor­ries of in­fla­tion have reen­tered the mar­ket after be­ing nonex­is­tent for more than a decade. Yields on U.S. Trea­sury bonds and notes have risen in the last sev­eral weeks as in­vestors have pre­dicted more in­fla­tion would come with the eco­nomic re­cov­ery.

The yield on the 10-year Trea­sury rose to 1.36% from 1.34% late Fri­day and has been ris­ing steadily through­out the year. The higher yields have helped lift banks, which rely on higher yields to charge more lu­cra­tive in­ter­est rates on loans. Mor­gan Stan­ley rose 1.8%.

Tech­nol­ogy stocks ac­counted for the big­gest share of the sell­ing. The sec­tor, which pow­ered much of the mar­ket’s gains in 2020, posted its fifth straight loss. That pull­back helped drag down the Nas­daq, while the Dow, which isn’t as heav­ily weighted with tech stocks, rose.

Tech stocks have en­joyed big gains through­out the pan­demic, as in­vestors bet that con­sumers spend­ing more time at home would in­creas­ingly rely on mo­bile de­vices, PCs, video stream­ing and other tech­nol­ogy prod­ucts and ser­vices.

But as the num­ber of new coro­n­avirus cases has de­clined re­cently after a surge late last year and more peo­ple get vac­ci­nated, in­vestors are be­gin­ning to snap up stocks in ar­eas of the mar­ket that are ex­pected to do bet­ter in a post-pan­demic econ­omy. Air­lines, which have been bat­tered by the COVID-19 pan­demic, rose after Deutsche Bank up­graded its view on the sec­tor and the po­ten­tial for re­cov­ery as COVID-19 cases fall and vac­ci­na­tion rates in­crease. Amer­i­can Air­lines jumped 9.4%, while Delta rose 4.5% and United Air­lines gained 3.5%.

Traders con­tin­ued to bid up shares in en­ergy com­pa­nies, which are get­ting a boost from higher en­ergy prices. The sec­tor has risen four of the last five days. Exxon Mo­bil rose 3.7%.

The price of U.S. crude oil rose 3.8% to $61.49 a bar­rel. It’s now up 27% for the year.

Brent crude, the in­ter­na­tional stan­dard, rose 3.7% to $65.24 a bar­rel, and is up 26% this year. Gold­man Sachs pre­dicted in a re­search note that the price would reach $70 by the sec­ond quar­ter.

The price of bit­coin, which sur­passed $50,000 for the first time last week, dropped 6.2% to $53,765 on Mon­day, ac­cord­ing to the cur­rency bro­ker­age Coin­base.

The slide fol­lowed a tweet late Fri­day by Elon Musk in which the Tesla chief ex­ec­u­tive said the prices of bit­coin and another cryp­tocur­rency, ethereum, “seem high.” This month, Tesla an­nounced that it had bought $1.5 bil­lion in bit­coin as part of a new in­vest­ment strat­egy, and that it would soon be ac­cept­ing bit­coin as pay­ment for its cars.

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