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* Materials outperform, tech retreats (Updates with close of session)
Following strong gains in the prior session, technology shares dipped in the resumption of a rotation by investors out of stocks that outperformed due to the coronavirus pandemic and into others viewed as likely to do well as the economy recovers. The S&P 500 materials and consumer staples sector indexes rose.
Yields on the benchmark 10-year Treasury bonds have stabilized after hitting a one-year high last week.
“Part of it is just because technology went up so much last year, and if interest rates are on the rise then the value of their future cash flows is diminished,” said Tom Hainlin, global investment strategist at U.S. Bank Wealth Management.
The S&P 500 on Monday logged its best day since June as markets cheered approval of a third COVID-19 vaccine in the United States and the U.S. House of Representatives’ green light for a $1.9 trillion coronavirus relief package.
The U.S. Senate will start debating President Joe Biden’s relief bill this week when Democrats aim to pass the legislation through a maneuver known as “reconciliation,” which would allow the bill to pass with a simple majority.
The S&P 500 technology sector index dropped, extending a pullback from late last month after a selloff in the U.S. bond market sparked fears over highly valued stocks.
Unofficially, the Dow Jones Industrial Average fell 0.46% to end at 31,390.47 points, while the S&P 500 lost 0.81% to 3,870.36.
The Nasdaq Composite dropped 1.69% to 13,358.79.
The Russell 2000 index of smaller companies declined, trimming its gain in 2021 to about 14%, compared with the S&P 500’s rise of under 4% in the same period.
Kohl’s Corp rose after it posted holiday-quarter results beyond market expectations on a boost in online sales and as the company reined in costs.
TV ratings provider Nielsen jumped after it sold its advanced video advertising business to television streaming platform provider Roku. Shares of Roku dropped.
Reporting by Noel Randewich in Oakland, California; Additional reporting by Medha Singh and Shashank Nayar in Bengaluru; Editing by Lisa Shumaker