Wall Street finishes mixed as tech slump offsets other gains

UPDATE: 11:10 a.m.

Wall Street ended mixed as slumps in several Big Tech companies offset gains in many other parts of the market.

Because of their huge size, the drops in Apple, Google’s parent company and other major technology stocks pulled the S&P 500 to a loss of 0.5% today even though more stocks rose than fell in the index. The tech-heavy Nasdaq dropped 2.4%, while the Dow Jones Industrial Average rose 1%.

Technology companies have been sliding in recent weeks as investors start to doubt whether the huge gains they made during the pandemic months can continue. Treasury yields rose again.

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Stocks are rising broadly on Wall Street Monday even as Apple and several other technology companies lag behind.

Banks and industrial companies were leading the way higher. Investors continued to closely watch the bond market, where another tick up in bond yields was a source of some concern.

The S&P 500 index was up 0.1% as of 2:51 p.m. Eastern and the Dow Jones Industrial Average rose 439 points, or 1.4%, to 31,944. The technology-heavy Nasdaq composite fell 1.6%.

Financial stocks had some of the best gains. Wells Fargo and Citigroup were up 2% or more.

Tech stocks were mostly lower. Apple fell 3.6% and Facebook was down 2.1%.

Trading has been choppy in recent weeks as investors fret over a sudden spike in long-term interest rates in the bond market. The S&P 500 is coming off its first weekly gain in three weeks.

“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.”

Bond yields were moving higher again, and the yield on the 10-year Treasury note rose to 1.59%. 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.

The U.S. economic aid package, passed narrowly by the Senate on Saturday, provides direct payments of up to $1,400 for most Americans and extends emergency unemployment benefits. It’s a victory for President Joe Biden and his Democratic allies, and final congressional approval is expected this week.

“That eliminates a major short-term risk and also puts a lot of money into the economy in the short term,” McMillan said.

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 fell 1.6% to $65.05 a barrel.