US stocks finish lower, undercut by tech sector

US stock markets ended lower on Tuesday, pulled down by Apple and Tesla, while materials stocks climbed as investors waited for the US Congress to approve another stimulus package.

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 US 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 US House of Representatives’ green light for a US$1.9 trillion coronavirus relief package.

The US 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.

Apple dipped about 2 percent and Tesla declined more than 4 percent , with the two companies contributing the most to the S&P 500’s loss for the day.

The S&P 500 technology sector index dropped 1.6 percent , extending a pullback from late last month after a selloff in the US bond market sparked fears over highly valued stocks. The consumer discretionary index dipped 1.3 percent , with Amazon falling 1.6 percent .

The Dow Jones Industrial Average fell 0.5 percent to end at 31,391, while the S&P 500 lost 0.8 percent to 3,870.

The Nasdaq Composite dropped 1.7 percent to 13,358. (Reuters)