US STOCKS-Nasdaq finishes higher, tech stocks retrace some losses

* Tech-focused stocks rebound
* Banks stocks drop as U.S. bond yields fall from highs
* U.S. consumer sentiment rises

(Updates close with volume, adds details)
By Gertrude Chavez-Dreyfuss
NEW YORK Feb 26 (Reuters) - The tech-heavy Nasdaq index
rallied in choppy trading on Friday, even as sentiment remained
fragile after the index's worst performance in four months the
day before as fears of rising inflation kept U.S. bond yields
near a one-year high.
The S&P 500 ended little changed, while the Dow index closed
lower after earlier dropping to a three-week low. The Dow still
posted gains of nearly 4% for the month, as investors bought
into cyclical companies set to benefit from an economic
reopening.
Nasdaq, which had its worst week since October, ended the
month roughly 1% higher while the S&P 500 posted a monthly gain
of about 2.6%.
Shares of Apple Inc AAPL.O , Amazon.com Inc AMZN.O ,
Microsoft Corp MSFT.O and Alphabet Inc GOOGL.O rose between
0.2% to 1.4% on Friday but had their worst week in months due to
a sharp rise in U.S. Treasury yields.
The benchmark 10-year U.S. Treasury yield US10YT=RR eased
to 1.404% after jumping to 1.614% on Thursday, roiling stock
markets. US/ Wall Street's fear gauge .VIX hovered at a
one-month high.
Tech stocks are particularly sensitive to rising yields
because their value rests heavily on future earnings, which are
discounted more deeply when interest rates go up.
"There's no question that the path in rates today is
higher," said Andrew Mies, chief investment officer at 6
Meridian.
The Dow Jones Industrial Average .DJI closed 469.64 points
lower, or 1.5%, to 30,932.37, the S&P 500 .SPX lost 18.19
points, or 0.48%, to 3,811.15 and the Nasdaq Composite .IXIC
added 72.91 points, or 0.56%, to 13,192.34.
Financials .SPSY and energy shares .SPNY , the best
performing S&P sectors this month, slipped 2% and 2.3% on
Friday. Technology stocks .SPLRCT rose 0.6% and semiconductor
stocks advanced 2.3% .SOX .
"There are a few tailwinds for stocks that we shouldn't lose
sight of," Mies said, citing President Joe Biden's $1.9 trillion
economic aid package before Congress. The S&P 500 value index .IVX dropped 1.3% while the growth
index .IGX rose 0.3% in a reversal of this month's trend.
An early surge in the shares of GameStop Corp GME.N
fizzled and left the video game retailer's stock down 6.4% on
Friday, throwing water on a renewed rally this week that has
left analysts puzzled. On the economic front, the latest data showed U.S. consumer
spending increased by the most in seven months in January but
price pressures remained muted.
Salesforce.com Inc CRM.N dropped 6.3% as the online
software company forecast full-year profit below market
expectations. Volume on U.S. exchanges was 15.54 billion shares on Friday,
compared with the 15.40 billion average for the full session
over the last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a
1.56-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favored decliners.
The S&P 500 posted four new 52-week highs and one new low;
the Nasdaq Composite recorded 54 new highs and 50 new lows.