Stocks end slightly below latest record highs as tech slips

U.S. stock indexes gave up some of their recent gains Monday, pulling the Standard & Poor’s 500 index slightly below the record high it hit last week.

Technology, communication and energy stocks weighed on the market, offsetting gains by a broad mix of companies, including banks and those that rely directly on consumer spending, such as Nike and Chipotle Mexican Grill.

Bond yields inched higher after easing most of last week. Investors have been focusing on the economic recovery as well as the risks higher inflation pose to consumers and companies. Those concerns have helped push up bond yields for much of this year.

Monday’s pullback snapped a three-day winning streak for the benchmark S&P 500, which closed out last week with its third straight weekly gain.

The S&P 500 slipped 0.81 point, or less than 0.1%, to 4,127.99. The Dow Jones industrial average fell 55.20 points, or 0.2%, to 33,745.40. The tech-heavy Nasdaq composite lost 50.19 points, or 0.4%, to 13,850. The S&P 500 and Dow each set record highs Friday.

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Small-company stocks, which have been outgaining the broader market this year, also fell. The Russell 2000 index of smaller companies gave up 9.69 points, or 0.4%, to close at 2,233.78. The index is up 13.1% so far this year, while the S&P 500, which tracks large companies, is up 9.9%.

Technology stocks were the biggest drag on the market. Apple fell 1.3%, and Google’s parent company slid 1.1%.

The sector has been choppy as investors shift money to other industries that could see solid gains as the economy recovers. Rising bond yields have also made technology stock values look pricey after months of big gains.

The yield on the 10-year U.S. Treasury note, which influences interest rates on mortgages and other loans, inched up to 1.67%. It ended Friday at 1.66% and had been as high as 1.75% on April 5.

Traders are showing cautious optimism about the economic recovery, especially in the U.S., where vaccine distribution has been ramping up and President Biden has advanced the deadline for states to make doses available to all adults to April 19.

Although many economists are projecting a strong economic rebound this year, some companies that stand to benefit from the reopening of the economy were among the decliners Monday. Cruise operators Carnival and Royal Caribbean fell 5.3% and 3.1%, respectively.

Nuance Communications soared 15.9% after Microsoft said it would buy the speech technology company for about $16 billion.

Alibaba’s U.S.-listed shares jumped 9.3% after the Chinese conglomerate said it would restructure its Ant Group financial affiliate to placate Chinese government regulatory concerns.

Wall Street will be watching company earnings reports this week, particularly several from big banks. JPMorgan Chase and Wells Fargo report on Wednesday, while Bank of America and Citigroup report on Thursday.

Investors expect big profits for the major banks, mostly due to rising interest rates and the ability for these banks to move loans that went bad in the early weeks of the pandemic back onto the “good” side of their balance sheets.