Major U.S. tech slump offsets Wall Street improvements

Major U.S. stock indexes closed mostly lower Monday as another rise in bond yields helped set off more heavy selling in technology companies.

The S&P 500 fell 0.5% after having been up 1% earlier. Because of their huge size, drops by Apple, Google’s parent company and other major technology stocks helped drag the S&P 500 into the red, even though more stocks rose than fell in the benchmark index.

The selling, which accelerated toward the end of the day, left the tech-heavy Nasdaq composite down 10.5% from the all-time high it reached Feb. 12. A drop of 10% or more from a recent peak is known on Wall Street as a “correction.”

Bond yields rose broadly. The yield on the 10-year Treasury note climbed to 1.60% from 1.55% late Friday.

The S&P 500 fell 20.59 points to 3,821.35. The Dow Jones Industrial Average rose 306.14 points, or 1%, to 31,802.44. The index briefly climbed more than 650 points. The Nasdaq lost 310.99 points, or 2.4%, to 12,609.16.

The Russell 2000 index added 10.77 points, or 0.5%, to 2,202.98.

Financial stocks had some of the best gains. Wells Fargo rose 3.3% and Citigroup gained 2.8%.

Apple fell 4.2%, Google’s parent Alphabet dropped 4.3% and Facebook slid 3.4%.

The latest move higher in bond yields fanned those concerns Monday.

“Interest rates reflect a real economic recovery, and they’re not going back down anytime soon,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “Right now, the market is struggling with that.”

Investors have been betting that trillions of dollars in coming government stimulus will help lift the economy out of its coronavirus-induced malaise.

There are also investors who are betting that stimulus and an improving economy will result in some amount of inflation down the road.

Rising oil prices are a part of that picture. After plunging with the onset of the pandemic, as demand plummeted, prices have been recovering in the past few months.

Last week, with oil prices rising, some observers were expecting the OPEC cartel and its allies to lift more restrictions and let the oil flow more freely. But OPEC agreed to leave most restrictions in place, despite growing demand.

Benchmark U.S. crude oil for April delivery fell $1.04, or 1.6% to $65.05 a barrel Monday. It’s still up 32.8% so far this year.