Written by DAMIAN J. TROISE and ALEX VEIGA AP Business Writers
Stocks gave up an early gain and wound up broadly lower on Wall Street, led by declines in tech heavyweights like Facebook and Apple. The S&P 500 gave up 0.5% Wednesday, its second loss in a row, while the tech-heavy Nasdaq dropped 2%. Bond yields mostly fell after rising earlier this week.
GameStop had another bumpy ride, losing a third of its value after releasing a disappointing earnings report. The money-losing video game retailer is still up more than sixfold this year after becoming a favorite of online investors who talked the stock up on online message boards. Crude oil prices rose 6%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
U.S. stock indexes are mostly lower in afternoon trading Wednesday as a sell-off in technology companies outweighs gains by banks and elsewhere in the market.
The S&P 500 index was down 0.2% as of 3:42 p.m. Eastern time after giving up an early gain. The benchmark index is on track for its second straight decline, adding to the market’s losses over the past couple of weeks. The Dow Jones Industrial Average rose 100 points, or 0.3%, to 32,527. The Nasdaq fell 1.6%. Bond yields were mostly lower after rising earlier this week.
Technology and communication stocks weighed on the market, pulling the tech-heavy Nasdaq down more compared to the other indexes. Apple was down 1.6%, while Facebook fell 2.5%.
Bank stocks, which took a beating on Tuesday, were among the best performers. Banks have been volatile the last couple of weeks as investors try to gauge the impact of higher interest rates on the U.S. economy.
Higher interest rates can slow economic momentum, but they also allow banks to charge more for loans. JPMorgan Chase added 1.1%.
Investors had their eye on Washington, where Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen spoke before the Senate about the government’s efforts to combat the economic impact of the coronavirus pandemic.
GameStop sank 31.6% after reporting results that missed Wall Street’s forecasts, though the stock is still up nearly sevenfold since the beginning of the year after it became a social media darling for a swarm of online investors. The company took no questions from investors on its quarterly conference call late Tuesday.
The pandemic remains a dominant topic for investors. Stocks fell on Tuesday after Germany, Europe’s biggest economy, and the Netherlands extended lockdowns and imposed new travel and business curbs in response to spikes in infection. That followed similar moves earlier by Italy and France.
“There’s a feeling that we’re not quite done with COVID-19 yet at all,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “That, combined with other concerns, is creating a lot of uncertainty.”
The bond market was relatively quiet for a change. The yield on the 10-year Treasury note fell slightly to 1.61%. It had been as high as 1.74% last week, which caused the stock market to go into selling mode.
Bond yields have risen this year as traders have been watching the potential for inflation pressures to pick up after struggling economies were flooded with credit and government spending. That has depressed U.S. bond prices, prompting some to shift money out of stocks.
While rising interest rates are a key concern, investors are still juggling worries about the speed of vaccine distribution, COVID-19 cases and the potential for future tax changes crimping corporate profits, McMillan said.
“There’s no central narrative that’s moving the market in one direction,” he said. “Smaller waves have the potential to rock the market back and forth.”