Tech selloff weighs on S&P 500, Nasdaq

(Reuters) – A selloff in technology stocks dragged on the S&P 500 and Nasdaq on Wednesday, with investors also cautious about brewing U.S.-China tensions at a time when policymakers are attempting to revive the global economy from a coronavirus-driven slump. (AMZN.O), Microsoft Corp (MSFT.O) and Facebook Inc (FB.O), which have led a recent rally, weighed on the tech-heavy Nasdaq, while healthcare .SPXHC and technology stocks .SPLRCT – which outperformed in the coronavirus-led market slump – were among the S&P 500 sector indexes in the red.

On the other hand, travel-related stocks including airlines .SPCOMAIR, cruise companies and hotel operators jumped between 2.4% and 4.5% after taking a beating earlier this year due to a virtual halt in global travel.

“(Traders are focusing on) the progress made in fighting the coronavirus and optimism that we can see past this very sharp downturn and return to a more normal state sometime in the second half of the year,” said Ed Keon, chief investment strategist at multi-asset manager QMA in Newark, New Jersey.

The easing of lockdowns, optimism about an eventual COVID-19 vaccine and massive U.S. stimulus have powered a recent stock market rally, helping the S&P 500 .SPX end on Tuesday at its highest level since early March.

However, Sino-U.S. worries have kept a lid on further gains, with President Donald Trump saying Washington would announce its response to China’s planned national security legislation on Hong Kong before the end of the week.

At 10:39 a.m. ET, the Dow Jones Industrial Average .DJI was up 177.27 points, or 0.71%, at 25,172.38, the S&P 500 .SPX was down 2.28 points, or 0.08%, at 2,989.49, and the Nasdaq Composite .IXIC was down 116.61 points, or 1.25%, at 9,223.61.

Facebook Inc (FB.O) and Twitter Inc (TWTR.N) slipped 2.6% and 2.3%, respectively, after Trump threatened to shutter social media companies a day after Twitter prompted readers to fact check his tweets.

Walt Disney Co (DIS.N) was set to announce its proposal for a phased reopening of its Orlando, Florida, theme parks to a local task force on Wednesday. Its shares gained 1.1%.

Investor attention will now turn to the U.S. Federal Reserve’s Beige Book of economic condition scheduled for release at 2 p.m. ET (1800 GMT).

Advancing issues outnumbered decliners nearly 2-to-1 on the NYSE and matched them on the Nasdaq.

The S&P index recorded four new 52-week highs and no new low, while the Nasdaq recorded 27 new highs and six new lows.

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