Stocks veer lower, just below record highs, as tech slides

The New York Stock Exchange is seen in New York, in this Monday, Nov. 23, 2020, file photo. Stocks are opening mostly lower on Wall Street as investors turn cautious following another record-setting run last week. The S&P 500 slipped less than 0.1% in the early going Monday, April 12, 2021, and other major market indexes were also lower. Big banks will be in focus this week as several of them report their latest quarterly earnings. (AP Photo/Seth Wenig, File)

Stocks veered lower in afternoon trading on Wall Street Monday after the market hit record highs last week. Investors are continuing to focus on the economic recovery as well as concerns about inflation and rising bond yields.

The S&P 500 index was down 0.2% as of 2:33 p.m. Eastern. The Dow Jones Industrial Average fell 107 points, or 0.3%, to 33,691 and the Nasdaq Composite fell 0.4%.

Technology stocks were the biggest drag on the market. The sector has been choppy as investors shift money to other industries that could see solid gains as the economy recovers. Rising bond yields have also made technology stock values look pricey after months of big gains.

The slide by technology companies offset gains from banks and a broad mix of companies that rely directly on consumer spending, including Nike and Chipotle.

Wall Street will be watching company earnings reports this week, particularly several from big banks. JPMorgan Chase and Wells Fargo report on Wednesday, while Bank of America and Citigroup report on Thursday.

Investors expect big profits for the major banks, mostly due to rising interest rates and the ability for these banks to move loans that went bad in the early weeks of the pandemic back onto the “good” side of their balance sheets.

The yield on the 10-year U.S. Treasury note, which influences interest rates on mortgages and other loans, inched up to 1.68%. It ended Friday at 1.66% and had been as high as 1.75% last Monday.

Investors are showing cautious optimism about the economic recovery, especially in the U.S., where vaccine distribution as been ramping up and President Joe Biden has advanced the deadline for states to make doses available to all adults to April 19.

Nuance Communications soared 16.3% after Microsoft said it would buy the speech technology company for about $16 billion.

Alibaba's U.S.-listed shares jumped 9.4% after the Chinese conglomerate said it would restructure its Ant Group financial affiliate to placate Chinese government regulatory concerns.