Wall Street slips on tech selloff
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 percent due to a drop in the shares of Apple, Microsoft and Alphabet.
Alphabet fell 1.2 percent to $960.55 after EU antitrust regulators hit the tech giant with a record $2.7 billion fine.
Since the beginning of the year, the tech index has jumped about 19 percent, 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."
Yellen is scheduled to take part in a discussion on global economic issues in London at 17:00 GMT. Investors expect Yellen to offer more insight into the state of the U.S. 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 percent chance of a rate hike at the Fed's December meeting.
At 9:38 a.m. ET, the Dow Jones Industrial Average was down 25.84 points, or 0.12 percent, at 21,383.71 and the S&P 500 was down 5.01 points, or 0.20 percent, at 2,434.06.
The Nasdaq Composite was down 28.06 points, or 0.45 percent, at 6,219.09.
Seven of the 11 major S&P 500 sectors were lower, with the telecommunications index's 1.16 percent fall leading the decliners.
Sprint rose 2.2 percent to $8.20 after the fourth-largest U.S. 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 percent.
T-Mobile was down 3.4 percent at $61.06 after Reuters reported that Sprint had put its merger talks with the company on hold.
General Motors slipped 0.6 percent to $34.30 after the automaker lowered its outlook for new sales in 2017. Fiat Chrysler fell 1.2 percent, while Ford was off 0.5 percent.
Advancing issues outnumbered decliners on the NYSE by 1,267 to 1,200. On the Nasdaq, 1,316 issues fell and 912 advanced.
Patrick Shmidt analyst Vertical Markets