S&P 500 slips as tech stocks pull market lower

The S&P 500 closed lower on Wednesday, unable to halt the prior day's selloff, as investors set aside optimism about the economic recovery by Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen.

The remarks by the top two US economic officials mirrored what they told Congress the day before, with Powell saying on Wednesday the most likely case is 2021 will be "a very, very strong year."

Wall Street has seesawed this week as a months-long rotation into economically sensitive energy and financial shares, which have gained on a growing outlook, was upended by falling bond yields that prompted beaten-down technology stocks to rise.

The 10-year yield fell to about 1.6%, a slide that had propped up highly valued technology shares that led the Nasdaq to double from year-ago lows. Value-oriented shares on Wednesday outpaced a decline in growth stocks, which include tech shares.

Investors have focused on the yield on the benchmark 10-year Treasury note, pondering whether there is room for long-term interest rates to run, said David Kelly, chief global strategist at JPMorgan Asset Management. "We're in a little bit of a lull here. We know that the economy is primed to begin to really accelerate in the second quarter," Kelly said. "But we haven't seen that acceleration yet so that's what we're waiting for."

Adding to an upward bias for most of the session was data showing US factory activity picked up in early March amid strong growth in new orders. But supply chain disruptions continued to exert cost pressures on manufacturers, keeping inflation fears in focus.

"Everybody's bullish about the prospects of a recovery right now," said David Yepez, lead equity analyst and portfolio manager at Exencial Wealth Advisors. "In order for the market to bottom we need to have more fear, and I don't feel like the market has fear right now."

Financials and industrials gained, while energy jumped as crude prices rebounded from a 6% fall in the last session.

Unofficially, the Dow Jones Industrial Average fell 5 points, or 0.02%, to 32,418.15, the S&P 500 lost 21.37 points, or 0.55%, to 3,889.15 and the Nasdaq Composite dropped 265.81 points, or 2.01%, to 12,961.89.

Apple Inc, Tesla Inc and Facebook Inc led decliners on the S&P 500.

Intel Corp retreated after earlier gains as the company, in its efforts to expand chipmaking capacity, announced plans to spend as much as $20 billion to build two factories in Arizona and open its factories to outside customers.

US-listed shares of Taiwan Semiconductor dropped, while semiconductor equipment makers Lam Research Corp, Applied Materials Inc and ASML Holding rose. Applied Materials was the biggest boost on the S&P 500.

Bitcoin gained after Tesla's founder, Elon Musk, said the company's electric vehicles can now be bought using bitcoin and the option will be available outside the United States later this year.

GameStop Corp tumbled more than 30% after the videogame retailer said it might cash in on a meteoric rise in its share price to fund its e-commerce expansion.