US STOCKS-Tech selloff hits Nasdaq, Powell comments limit declines

Reuters

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    * Fed's Powell says economy still needs Fed support
    * Growth stocks resume slide
    * Tesla falls as bitcoin sell-off weighs
    * Home Depot slips on consumer spending outlook
    * Indexes down: Dow 0.53%, S&P 0.97%, Nasdaq 2.47%    

 (Adds comments, updates prices to early afternoon)
    By Devik Jain and Shreyashi Sanyal
    Feb 23 (Reuters) - The Nasdaq index fell in volatile trading
on Tuesday as investors sold off mega-cap growth stocks on
valuation concerns, although Federal Reserve Chairman Jerome
Powell's comments on the economy helped ease some selling
pressure.
    In his testimony to the Senate Banking Committee, Powell
pushed back on suggestions that the U.S. central bank's support
for the economy risked inflating a dangerous asset bubble.
 urn:newsml:reuters.com:*:nL1N2KT11N  urn:newsml:reuters.com:*:nL1N2KS1RK
    Fears of a potential spike in inflation from a raft of
stimulus measures and a rise in bond yields have triggered a
selloff in the technology-related stocks, which were at the
heart of a stunning rally that drove major indexes to record
levels this year.
    "What the market has been digesting for the last week or so
is what it means when the yield on the U.S. 10-year rises? That
clearly suggests that either we are going to get some stronger
economic activity or inflation is on the rise," said Art Hogan,
chief market strategist at National Securities in New York.    
    "And if you made the assumption that inflation is on the
rise and sold off some stocks, and then you hear that the Fed
plans to stick to lower rates and quantitative easing then it
might assuage some of those fears." 
    Shares of Netflix Inc  NFLX.O , Alphabet Inc  GOOGL.O ,
Microsoft Corp  MSFT.O , Amazon.com Inc  AMZN.O  and Apple Inc
 AAPL.O  slipped between 0.5% and 3.3%, while Treasury yields
remained elevated.
    "As the economy reopens, rates are going to rise and that's
going to especially hit the high valuation of tech stocks, where
earnings and cash flows are much farther out in the future than
some of the more economically sensitive areas of the market,"
said Ross Mayfield, investment strategy analyst at Baird, in
Milwaukee.
    Six of the 11 major S&P 500 sectors were in the red, with
consumer discretionary  .SPLRCD , technology  .SPLRCT  and
communication services  .SPLRCL  among the biggest decliners.
    Value stocks  .IVX , which are poised to benefit from an
economic rebound, have outperformed growth shares  .IGX  in
February.
    The S&P 500 banks index  .SPXBK  rose 0.6% to a one-year
high, somewhat offseting the tech drag that sent the benchmark
index  .SPX  down as much as 1.7% before Powell's testimony
began.
    A slump in bitcoin  BTC=BTSP  hurt shares of Tesla Inc
 TSLA.O , which had invested $1.5 billion in the cryptocurrency
recently. The electric-vehicle maker slid 5.8% and was set to
plunge into the red for the year.  urn:newsml:reuters.com:*:nL8N2KT2XN
    Cryptocurrency miners Riot Blockchain Inc  RIOT.O  and
Marathon Patent Group Inc  MARA.O  plunged more than 24% each,
while bitcoin bank Silvergate Capital Corp  SI.N  slid 22.2%.
 urn:newsml:reuters.com:*:nL1N2KT09F
    At 12:47 p.m. ET the Dow Jones Industrial Average  .DJI  was
down 165.56 points, or 0.53%, at 31,356.13, the S&P 500  .SPX 
was down 37.72 points, or 0.97%, at 3,838.78 and the Nasdaq
Composite  .IXIC  was down 334.00 points, or 2.47%, at
13,199.04. 
    Home Depot Inc  HD.N  fell 4.2% after the home improvement
retailer warned it was unable to predict how consumer spending
would evolve this year.  urn:newsml:reuters.com:*:nL4N2KT2F3
    Declining issues outnumbered advancers for a 2.78-to-1 ratio
on the NYSE and a 5.09-to-1 ratio on the Nasdaq.
    The S&P index recorded 45 new 52-week highs and no new low,
while the Nasdaq recorded 133 new highs and 54 new lows.

 (Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru;
Editing by Anil D'Silva and Shounak Dasgupta)
 ((Devik.Jain@thomsonreuters.com; within U.S. +1 646 223 8780;
outside U.S. +91 80 6182 2062))

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