S&P 500 drops to third-straight loss after tech rally fades

Associated Press

NEW YORK

Another afternoon fizzle for stocks left the Standard & Poor’s 500 index with its third-straight loss on Tuesday.

The market seemed like it was headed for a gain in the morning, after technology stocks recovered from one of their few stumbles this year. But the tech rally lost momentum as the afternoon went on, and losses for telecom stocks and utilities helped cement the S&P 500’s longest losing streak in nearly four months.

The S&P 500 fell 9.87 points, or 0.4 percent, to 2,629.57. It had been up 0.3 percent in the morning, and it marked the second- straight day where an early rally ended up petering out.

The market’s ups and downs have come as investors sift through Congress’ twin proposals to revamp the tax system. The Senate and House of Representatives are trying to reconcile their respective versions before sending it to President Donald Trump for his approval, and investors are trying to figure out which industries and companies will come out as winners and losers from it.

After leading the market for most of this year, technology stocks moved into the losers’ column recently. Technology companies already pay some of the lowest effective tax rates of companies in the S&P 500, so they have less to gain from the proposal.

Tech stocks in the S&P 500 began to stumble last week as expectations ramped up for the tax overhaul and as investors shifted into companies that stand to benefit most from lower rates, such as financial companies. It culminated in a loss of 1.9 percent for S&P 500 tech stocks Monday, the first trading day after the Senate passed its version of the tax overhaul. The Senate’s proposal to keep the alternative minimum tax for all companies also hurt tech stocks.

It’s a rare stumble for the tech industry, which had climbed twice as much as the S&P 500 in the first 11 months of the year. And that attracted buyers.