Wall Street falls with tech shares as yields up

By Caroline Valetkevitch

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 27, 2023. REUTERS/Brendan McDermid

• Summary

• Companies

• Consumer confidence rose unexpectedly in March
• Alibaba shares jump
• Indexes: Dow down 0.3%, S&P 500 down 0.5%, Nasdaq down 0.9%

March 28 (Reuters) – U.S. stocks were lower in afternoon trading on Tuesday, led by a nearly 1% decline in the Nasdaq as higher Treasury yields hit technology-related shares.

Shares of Apple (AAPL.O) and Microsoft (MSFT.O) along with other technology-related shares, which tend to be the most negatively affected by rising yields, weighed the most on the S&P 500.

Yields have climbed from six-months lows hit Friday as investors have been cautiously optimistic that stress in the banking sector following some recent regional bank failures may be subsiding.

Shares of First Citizens BancShares Inc (FCNCA.O) were up about 2.2% on Tuesday, a day after the stock rose more than 50% after it said it would acquire the deposits and loans of Silicon Valley Bank.

U.S. consumer confidence unexpectedly increased in March, according to a survey, which also showed Americans are becoming a bit anxious about the labor market.

The rise in yields “is causing a little bit of cautiousness in the market,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York, while data suggested “consumers are not too cheerful about rates going up and the prospects of a recession.”

Investors also paid close attention to comments in the first congressional hearing into the collapse of the two U.S. regional lenders. Both Democratic and Republican lawmakers pressed the Federal Reserve’s top banking regulator on whether the central bank should have been more aggressive in its oversight of Silicon Valley Bank.

“If the market thinks there’s not a banking crisis and that’s in the rear view mirror, that would mean the Fed is able to hold rates higher for longer,” said Irene Tunkel, chief U.S. equity strategist at BCA Research.

The Dow Jones Industrial Average (.DJI) fell 108.04 points, or 0.33%, to 32,324.04, the S&P 500 (.SPX) lost 19.76 points, or 0.50%, to 3,957.77 and the Nasdaq Composite (.IXIC) dropped 105.51 points, or 0.9%, to 11,663.33.

The KBW regional banking index (.KRX) was down on the day.

Strategists said that as lenders report quarterly results from next month, the market will learn more details about the health of banks following the collapse of some big regional lenders that fanned fears of a sector-wide contagion.

Alibaba Group Holding jumped 14.1% after the company said it plans to split its business into six main units covering e-commerce, media and the cloud.

Advancing issues outnumbered declining ones on the NYSE by a 1.04-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favored decliners.

The S&P 500 posted 6 new 52-week highs and no new lows; the Nasdaq Composite recorded 30 new highs and 124 new lows.

Reporting by Caroline Valetkevitch; additional reporting by Shubham Batra, Amruta Khandekar, Sruthi Shankar and Shashwat Chauhan in Bengaluru; Editing by Savio D’Souza, Vinay Dwivedi and Aurora Ellis