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S&P 500 suffers a third straight loss after tech rally fades

Associated Press 

Another afternoon stock market fizzle 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, and losses for telecom stocks and utilities helped cement the S&P 500’s longest losing streak in nearly four months.

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The S&P 500 fell 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 Dow Jones industrial average lost 0.5 percent, to 24,180.64, and the Nasdaq fell 0.2 percent, to 6,762.21.

The ups and downs have come as investors sift through Congress’s twin proposals to revamp the tax system. The Senate and House are trying to reconcile their respective versions before sending a bill to President Trump, and investors are trying to figure out which industries and companies will come out as winners and losers.

After leading the market for most of this year, technology stocks moved into the losers’ column recently. Tech 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.

S&P 500 tech stocks began to stumble last week as expectations ramped up for a tax overhaul and as investors shifted into companies that stand to benefit the most from lower rates, such as financial companies. It culminated in a loss of 1.9 percent for S&P 500 tech stocks on 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.

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

Chip makers and Internet companies led the market on Tuesday, and technology stocks in the S&P 500 rose 0.2 percent. It was the only sector of the 11 that make up the index to rise.

Micron Technology rose 3.3 percent for the largest gain in the S&P 500.

The rest of the market, though, was down on Tuesday. Telecom stocks fell 1.8 percent for the sharpest loss among the index’s sectors. A day earlier, it had the market’s strongest gains. Utilities, industrial companies, and retailers were also weak.

Edison International slumped 12.8 percent, the most in the S&P 500. Wildfires are raging outside Los Angeles, and investors are guessing the damage could result in losses for the company’s Southern California Edison electric utility subsidiary.

In the bond market, Treasury yields fell as bond prices rose. The yield on the 10-year Treasury note dropped to 2.35 percent from 2.37 percent late Monday.