U.S. stocks closed lower Wednesday as investors continued to pull back from the technology stocks that led the market higher for much of the last year. All three major indexes closed in negative territory after starting the day higher. As the session continued, losses among technology stocks widened, pulling down the Nasdaq Composite and the S&P 500. The Dow Jones Industrial Average tumbled into the red just before the closing bell. Newsletter Sign-up Markets A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data. Stocks have seesawed so far this week as investors have tried to make sense of ongoing volatility in the U.S. government bond market. Money managers have also been assessing the valuations on stocks after the major indexes climbed over 70% since the pandemic-fueled rout last March. Investors said a catalyst behind a late-day pullback wasn’t immediately clear. “It was surprising to see the market tail off at the end of the day,” said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance. “We had what was a typical cyclical stocks rally.” The Dow ultimately fell 3.09 points, or less than 0.1%, to 32420.06 after trading up more than 360 points earlier in the day. The S&P 500 also finished the day lower, falling 21.38 points, 0.5%, to 3889.14 after starting the day higher, too. The Nasdaq Composite tumbled for a second consecutive day, losing 265.81 points, or 2%, to 12961.89. The fall marked the index’s largest two-day decline since March 4. In the bond market, the yield on the 10-year Treasury note fell for a fourth consecutive day, finishing at 1.613% from 1.637% Tuesday. Bond yields rise as prices fall. The yield had closed as high as 1.730% last week after starting 2021 below 1%. The sharp increase in bond yields in recent weeks has taken the steam out of technology stocks, but the move down in yields on Wednesday did little to stabilize the sector. Apple fell $2.45, or 2%, to $120.09. Netflix lost $14.28, or 2.7%, to $520.81. Amazon.com edged down $50.43, or 1.6%, to $3087.07. All three companies, which were among the stocks that led markets higher last year, are also down for the year. “We are now one year into this rally: We’ve seen a massive decline and a massive rally, and my sense is that markets are just going to pause for breath from here,” said Brian O’Reilly, head of market strategy for Mediolanum International Funds. “Gains are going to be much harder to come by for the rest of the year.” Federal Reserve Chairman Jerome Powell has tried to assuage investors in recent weeks by reiterating that the Fed will continue to support the economy until the recovery is more robust. Still, money managers are betting that inflation will climb sharply, and could spur the central bank to raise interest rates or pare back bond purchases. Mr. Powell on Tuesday told lawmakers that he doesn’t think fiscal stimulus would have a large or persistent effect on inflation. He also stressed that policy makers could act to tamp down rising price pressures if needed. On Wednesday, Mr. Powell and Treasury Secretary Janet Yellen testified before the Senate Banking Committee, with a message similar to Tuesday’s before the House Financial Services Committee. Mr. Powell indicated that he isn’t concerned about the recent rise in bond yields, saying that it seems that rates have responded to news about the Covid-19 vaccine rollout and, ultimately, growth. Footage shows authorities working to dislodge a giant container ship that remained stuck in the Suez canal, blocking one of the world’s busiest trade routes for oil and manufactured goods. Photo: Suez Canal Authority/Associated Press “Yields have moved very quickly, and it was a classic case of too far, too fast. Rates are the most overbought they have been since 1994,” said Hani Redha, a portfolio manager at PineBridge Investments. “There was a general expectation from markets that the Fed would try to contain any sharp rise in yields and that has not happened, which has been a surprise.” Among the S&P 500’s 11 sectors, energy outperformed all other groups for the day. Diamondback Energy, Exxon Mobil and Marathon Oil all gained 2% or more. Brent crude, meanwhile, rose 6% to $64.41 a barrel amid efforts to free a giant container ship stuck in the Suez Canal, blocking all traffic on one of the world’s busiest shipping arteries. The Suez Canal is a vital trade route for tankers carrying oil and natural gas. In corporate news, shares of videogame retailer GameStop fell $61.41, or 34%, to $120.34 after its earnings missed analysts’ forecasts and the company didn’t issue guidance for the year. Still, the meme stock beloved by individual investors is up 539% in the year to date. ViacomCBS fell $21.15, or 23%, to $70.10, marking its largest percentage decline on record. The media company had dropped more than 9% Tuesday after saying it was seeking to raise $3 billion by selling new shares. Meanwhile, the Russell 2000 index fell 2.4%, extending its losses into a third consecutive day. Overseas, the Stoxx Europe 600 ended the day essentially flat, rising less than 0.1%. Internationally, investors have mulled signs that the global economic recovery may take longer than anticipated because of rising Covid-19 cases and extended lockdowns in many countries. In Asia, stock benchmarks in Hong Kong and Japan led declines, both falling more than 2% by the close of trading. Hong Kong’s Hang Seng Index entered correction territory, with a drop of more than 10% from a recent peak in February. Traders worked the floor of the New York Stock Exchange on Tuesday. Photo: Colin Ziemer/New York Stock Exchange/Associated Press —Joanne Chiu contributed to this article. Write to Will Horner at William.Horner@wsj.com and Caitlin McCabe at firstname.lastname@example.org Corrections & Amplifications Federal Reserve chairman Jerome Powell and Treasury Secretary Janet Yellen were scheduled to testify to a Senate committee hearing at 10 a.m. ET. An earlier version of this article incorrectly said the hearing was scheduled for 2 p.m ET. (Corrected on March 24, 2021) Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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