* Tech rebounds a bit as bond yields ease further
* GameStop drops ahead of quarterly results
* S&P 500 up about 80% from the lows of pandemic-led crash
* Indexes fall: Dow 0.39%, S&P 500 0.14%, Nasdaq 0.23%
* (Adds midafternoon prices)
NEW YORK, March 23 (Reuters) – The S&P 500 edged lower on Tuesday in seesaw trade on sliding financial and energy stocks that have benefitted recently from a sharp rise in market interest rates, while beaten-down tech stocks rebounded in a reversal of trends the past few days.
Rates edged lower as Federal Reserve Chair Jerome Powell told U.S. lawmakers that a coming round of post-pandemic price hikes will not fuel a destructive breakout of persistent inflation – fears that had driven a recent spike in yields.
Oil prices that slumped more than 3% on worries that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in demand also pushed the energy sector lower.
Falling yields on 10-year U.S. Treasury notes from a 14-month high set last week have deflated this year’s outperformance in the financial and energy sectors.
Conversely, technology-related shares that had recently declined sharply on the rising rate environment have recuperated a bit as yields eased, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
“A lot of these (tech) stocks have seen 10% to 20% corrections and interest rates have backed off a bit,” Tuz said. “The money seems to be going back into them and out of the groups that did extremely well the last three months, specifically financials and energy.”
The benchmark S&P 500 and the blue-chip Dow have rallied about 79% from their pandemic lows hit exactly a year ago, while the tech-heavy Nasdaq has doubled in value.
The CBOE volatility index eased to its lowest level in 13 months.
“We’ve seen a very quick movement in (yields) on mostly fears around inflation and the market is taking a pause here over the last week,” said Jon Adams, senior investment strategist at BMO Global Asset Management in Chicago.
By 2:36 p.m. EDT, the Dow Jones Industrial Average fell 126.85 points, or 0.39%, to 32,604.35, the S&P 500 lost 5.46 points, or 0.14%, to 3,935.13 and the Nasdaq Composite dropped 30.45 points, or 0.23%, to 13,347.09.
Growth stocks, which include technology shares, rose 0.4% while underpriced value stocks fell 0.9%.
Shares of GameStop Corp dropped 4.1% ahead of the company’s fourth-quarter results due after markets close. The videogame retailer announced the exit of its chief customer officer in the latest sign of a broader overhaul into an e-commerce firm.
ViacomCBS Inc tumbled about 5% after the media firm launched $3 billion stock deals to raise capital for investments in streaming.
U.S.-listed shares of Chinese internet search provider Baidu Inc slid 1.5% following a flat Hong Kong debut as investors were wary of a fundraising flurry in the city and questioned the company’s growth plans.
Declining issues outnumbered advancing ones on the NYSE by a 2.70-to-1 ratio; on Nasdaq, a 4.33-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 43 new highs and 71 new lows. (Reporting by Herbert Lash in New York Additional reporting by Medha Singh and Devik Jain in Bengaluru Editing by Maju Samuel and Matthew Lewis)