US STOCKS-Nasdaq, S&P 500 end lower as U.S. yields rise; Disney lifts Dow
* Technology-related companies resume slide
* Discovery (JO: DSBPp ) rises on strong paid streaming subscribers forecast (Updates to close, adds new analyst comment)
By Gertrude Chavez-Dreyfuss
NEW YORK, Feb 22 (Reuters) - The S&P 500 and Nasdaq closed lower on Monday as climbing Treasury yields and prospects of rising inflation triggered valuation concerns, hitting shares of high-flying growth companies.
The Dow industrials ended higher, boosted by a surge in Walt Disney (NYSE: DIS ) Co DIS.N shares.
U.S. benchmark 10-year Treasury yields were up at 1.37% US10YT=RR on Monday. Since the beginning of February, 10-year yields have risen about 26 basis points, on track for their largest monthly gain in three years.
Still, some analysts noted that the stocks pullback was expected after a torrid rally this year and in 2020.
"This is a small pulback primarily because stocks got a little overheated and there are a few worries out there that people are making mountains of out molehills," said Brian Reynolds, chief market strategist, at Reynolds Strategy.
He cited worries about the rise in Treasury yields, but noted that junk bond yields hit all-time lows last week, suggesting there has been a shift from the safety of Treasuries to the riskiness of corporates among investors.
"That's bullish for stocks," he added.
Federal Reserve Chair Jerome Powell is scheduled to speak before the Senate Banking Committee on Tuesday, and investors are expected to look for any potential changes to the central bank's dovish outlook. investors are grappling with ... is what does this (higher Treasury yields) mean from an inflation perspective. Because of that, there's a little bit of tantrum in the market right now," said Lindsey Bell, chief investment strategist at Ally Invest, in Charlotte, North Carolina.
Shares of Apple Inc AAPL.O , Microsoft Corp MSFT.O , Alphabet Inc GOOGL.O , Tesla Inc TSLA.O and Amazon.com Inc AMZN.O resumed their slide from the previous week.
Largely upbeat fourth-quarter earnings had powered Wall Street's main indexes to record highs early last week, but the rally lost steam, in part due to fears of a potential snag in U.S. vaccination efforts and inflation concerns emanating from stimulus measures.
Unofficially, the Dow Jones Industrial Average .DJI rose 29.08 points, or 0.09%, to 31,523.4, the S&P 500 .SPX lost 30.2 points, or 0.77%, to 3,876.51 and the Nasdaq Composite .IXIC dropped 341.42 points, or 2.46%, to 13,533.05.
The S&P 500 .SPX declined for five straight sessions, its longest such streak in a year.
Value stocks .IVX have outperformed growth shares .IGX in February, with investors betting on a rebound in industrial activity and a pickup in consumer demand as countries roll out vaccines to tame the pandemic.
The S&P 500 industrials .SPLRCI and financial sector .SPSY both rose, while energy stocks .SPNY surged on higher oil prices. [O/R
Discovery Inc DISCA.O jumped after the media company said it was expecting 12 million global paid streaming subscribers by the end of February, as coronavirus-led restrictions kept people at home. Corp KSS.N gained after a group of activist investors nominated nine directors to the department store chain's board. Financial Group Inc PFG.O added after a media report that activist investor Elliott Management Corp had taken a stake in the life insurance company and planned to push for changes.
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