US STOCKS-Nasdaq gains ground as tech stocks recover some losses

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
* Tech-focused stocks rebound
* Energy stocks slip as oil prices slide
* Banks stocks drop as U.S. bond yields ease
* Indexes: Dow down 0.4%, S&P up 0.7%, Nasdaq adds 1.7%

(Adds comment, details; updates prices)
By Devik Jain and Medha Singh
Feb 26 (Reuters) - The tech-heavy Nasdaq clawed back some
losses on Friday, rebounding from its worst day in four months
even as sentiment remained fragile, with fears of a rise in
inflation keeping U.S. bond yields near a one-year high.
Shares of Apple Inc AAPL.O , Amazon.com Inc AMZN.O ,
Microsoft Corp MSFT.O and Alphabet Inc GOOGL.O edged up
between 1.1% and 2.6%, but were headed for their worst week in
months.
The benchmark 10-year U.S. Treasury yield US10YT=RR eased
to 1.478% after jumping 1.614% overnight, roiling stock markets.
Wall Street's fear gauge .VIX hovered at a one-month high.
US/
"If the interest rates level out here and they stop rising
it's going to be fine but if the trajectory of rates continues
to rise at the same rate that creates a problem," said Jamie
Cox, managing partner for Harris Financial Group.
"This is more of a temporary blip in my opinion on people
thinking that there's going to be some inflationary spike."
The major averages were knocked off their all-time highs
last week after a sharp rise in U.S. Treasury yields triggered a
selloff in some of the mega-cap technology stocks.
Tech stocks are particularly sensitive to rising yields
because their value rests heavily on future earnings, which are
discounted more deeply when bond returns go up.
The Dow is poised for its best month since November 2020 as
investors bought into cyclical companies set to benefit from an
economic reopening, while the Nasdaq is still up 2% for the
month despite the recent rout.
Financials .SPSY and energy shares .SPNY , the best
performing S&P sectors this month, slipped about 0.2% and 1% on
Friday. Technology stocks rose 0.6% and semiconductor stocks
advanced .SOX about 1%. O/R
The S&P 500 value index .IVX dropped 0.6% while the growth
index .IGX jumped about 1% in a reversal of this month's
trend.
At 12:31 p.m. ET the Dow Jones Industrial Average .DJI
fell 130.05 points, or 0.41% , to 31,271.96, the S&P 500 .SPX
gained 26.81 points, or 0.70%, to 3,856.15 and the Nasdaq
Composite .IXIC gained 226.86 points, or 1.73%, to 13,346.29.
Latest data showed U.S. consumer spending increased by the
most in seven months in January but price pressures remained
muted.
Stimulus will be back in focus as the Democratic-controlled
U.S. House of Representatives aims to pass President Joe Biden's
$1.9 trillion coronavirus aid bill on Friday in what would be
the first major legislative victory of his presidency.
Salesforce.com Inc CRM.N dropped 4.6% as the online
software company forecast full-year profit below market
expectations. Declining issues outnumbered advancers by a 1.6-to-1 ratio
on the NYSE and by a 1.4-to-1 ratio on the Nasdaq.
The S&P 500 posted one new 52-week high and one new low
while the Nasdaq recorded 42 new highs and 116 new lows.

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