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US STOCKS-S&P 500, Nasdaq fall as tech slides and inflation concerns weigh

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April Joyner
·3 min read
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* U.S. producer prices rise, retail sales rebound in January

* Verizon, Chevron jump as Berkshire Hathaway reveals bigstakes

* Dow up 0.2%, S&P down 0.2%, Nasdaq down 0.9%(Updates to mid-afternoon trade, changes byline, adds NEW YORKto dateline)

By April Joyner

NEW YORK, Feb 17 (Reuters) - The S&P 500 and the Nasdaq fellon Wednesday as concerns about inflation pressured stocks andinvestors rotated out of technology shares.

The Dow Jones Industrial Average edged higher, however,aided in part by gains in shares of Verizon Communications Incand Chevron Corp, which rose after WarrenBuffett's Berkshire Hathaway Inc disclosed majorinvestments in the companies on Tuesday. Verizon shares climbed5.0%, and Chevron shares advanced 2.7%.

Technology shares led losses on the S&P 500 and Nasdaq.Apple Inc, PayPal Holdings Inc and Nvidia Corpweighed most on both indexes. The S&P 500 tech indexfell 1.3%.

Both of those indexes briefly pared losses while the Dowmomentarily added to gains after the release of minutes from theFederal Reserve's January policy meeting. All of the meeting'sparticipants supported the decision to keep rates unchanged andmaintain an accommodative monetary policy.

The Fed has pledged to pin interest rates near zero untilinflation rises to 2% and looks set to exceed that goal. Thatstance, coupled with President Joe Biden's proposed $1.9trillion package for pandemic relief, has some analysts warningof a coming surge in inflation.

As a result, some investors have considered whether the Fedmay have to change course sooner than expected. Data released onWednesday showed a substantial jump in U.S. producer prices anda strong rebound in retail sales.

Fears that the Fed may have to change course on policy morequickly than expected have driven recent declines in stocks.Those worries have been bolstered by a sharp rise in benchmarkTreasury yields, fueled in part by expectations for greaterinflation.

"You maybe have to put somewhere in the foreseeable futurethat they have to do something," said Michael O'Rourke, chiefmarket strategist at JonesTrading in Stamford, Connecticut,referring to the Fed.

"But it's a high threshold we have to cross in order to getthem to react," he added. "That's why we're not selling offmassively."

The Dow Jones Industrial Average rose 50.95 points,or 0.16%, to 31,573.7, the S&P 500 lost 9.33 points, or0.24%, to 3,923.26 and the Nasdaq Composite dropped124.72 points, or 0.89%, to 13,922.78.

Wells Fargo & Co shares jumped 5.2% after a reportsaid the lender won Fed acceptance for overhauling riskmanagement and governance tied to regulatory asset cap.

U.S.-listed shares of Shopify Inc slid 2.8% afterthe Canadian e-commerce giant hinted at slower revenue growth in2021 as vaccine rollouts encourage people to return to storesafter a year marked by an upsurge in online shopping.

Declining issues outnumbered advancing ones on the NYSE by a1.52-to-1 ratio; on Nasdaq, a 1.77-to-1 ratio favored decliners.

The S&P 500 posted 23 new 52-week highs and no new lows; theNasdaq Composite recorded 161 new highs and nine new lows.(Reporting by April Joyner; Additional reporting by Devik Jainand Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasguptaand Cynthia Osterman)