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US: Wall Street slips on tech selloff
[BENGALURU] Wall Street was pulled lower by a selloff in technology shares at the open on Tuesday, while investors awaited clues on interest rate hikes from Federal Reserve Chair Janet Yellen's talk in London.
The technology index fell 0.7 per cent due to a drop in the shares of Apple, Microsoft and Alphabet.
Alphabet fell 1.2 per cent to US$960.55 after EU antitrust regulators hit the tech giant with a record US$2.7 billion fine.
Since the beginning of the year, the tech index has jumped about 19 per cent, making it the biggest force behind the S&P's record-setting rally.
However, the sector has come under pressure of late over concerns about lofty valuations. To make matters worse, investors are also shifting to high-dividend paying defensive sectors such as utilities in a rising interest rate environment.
"The indices continue to hover near the very high end of the recent ranges, suggesting this week's end-of-the-quarter window dressing is likely to see more sector rotation," Peter Cardillo, chief market economist at First Standard Financial, wrote in a note.
"The broadening out of the markets, we believe, is essential for the markets to escape a near-term correction."
Ms Yellen is scheduled to take part in a discussion on global economic issues in London at 1pm ET (1700 GMT). Investors expect Ms Yellen to offer more insight into the state of the US economy, which would support the Fed's forecast of a rate hike this year.
Fed officials have signaled that they would look through a slowdown in inflation and continue on their current path for hikes. But investors are skeptical and market pricing shows only a 40 per cent chance of a rate hike at the Fed's December meeting.
At 9:38am ET, the Dow Jones Industrial Average was down 25.84 points, or 0.12 per cent, at 21,383.71 and the S&P 500 was down 5.01 points, or 0.20 per cent, at 2,434.06.
The Nasdaq Composite was down 28.06 points, or 0.45 per cent, at 6,219.09.
Seven of the 11 major S&P 500 sectors were lower, with the telecommunications index's 1.16 per cent fall leading the decliners.
Sprint rose 2.2 per cent to US$8.20 after the fourth-largest US wireless service provider was said to be in talks with Charter Communications Inc and Comcast Corp about a wireless partnership. Comcast and Charter were down about 0.7 per cent.
T-Mobile was down 3.4 per cent at US$61.06 after Reuters reported that Sprint had put its merger talks with the company on hold.
General Motors slipped 0.6 per cent to US$34.30 after the automaker lowered its outlook for new sales in 2017. Fiat Chrysler fell 1.2 per cent, while Ford was off 0.5 per cent.
Advancing issues outnumbered decliners on the NYSE by 1,267 to 1,200. On the Nasdaq, 1,316 issues fell and 912 advanced.