US STOCKS-Nasdaq hits correction, Dow advances as stimulus bill nears finish line

* Disney gains as California allows theme parks to reopen
* Bank stocks advance as yields rise on stimulus bill
* GameStop jumps after tapping Ryan Cohen to lead transition

(Updates following end of session)
By Herbert Lash and Karen Pierog
March 8 (Reuters) - Technology-related shares sold off on
Monday in a big downturn that pushed the Nasdaq into corrective
territory and offset stocks that rose on hopes the $1.9 trillion
COVID-19 relief bill will spur the U.S. economy.
The big technology stocks that have led Wall Street to scale
successive peaks over the past year's rally fell with the Nasdaq
closing down 2.41%, roughly 10.5% below its Feb. 12 record close
of 14,095.47. Financial shares and restaurant and travel-related stocks
that are expected to do well when the economy reopens rose but
were unable to offset the weight of the bigger tech shares that
dominate the U.S. stock market.
After the legislation won U.S. Senate approval on Saturday,
President Joe Biden said he hoped for a quick passage of the
revised coronavirus relief package by the Democrat-controlled
House of Representatives so he could sign it and send $1,400
direct payments to Americans. Prospects of more government spending and faster economic
growth have stoked fears of a spike in inflation, sending the
benchmark 10-year Treasury yield to near one-year highs.
U.S. Treasury Secretary Janet Yellen, however, said on
Monday the package would fuel a "very strong" U.S. recovery and
she did not expect the economy to run too hot because of the
increased spending. In the S&P 500, the financial sector .SPSY was the biggest
boost, hitting a record as higher market interest rates and a
steeper yield curve helped banks. Industrials .SPLRCI were
right behind, also reaching a record high, while the materials
sector .SPLRCM neared an all-time peak. The technology
.SPLRCT sector was deepest in the red.
As bonds yields have moved higher, concerns about equity
valuations for growth-oriented stocks and tech stocks
specifically have weighed on the Nasdaq relentlessly the last
three weeks, said Michael James, managing director of equity
trading at Wedbush Securities in Los Angeles.
Financials, along with restaurant and travel-related stocks
that will do well as the economy reopens, have been leading the
charge higher, James said.
“People have been reallocating assets into those sectors.
It's been coming out of growth-tech to fund that those
purchases,” he said.
The Dow Jones Industrial Average .DJI rose 306.14 points,
or 0.97%, to 31,802.44, the S&P 500 .SPX lost 20.59 points, or
0.54%, to 3,821.35 and the Nasdaq Composite .IXIC dropped
310.99 points, or 2.41%, to 12,609.16.
Volume on U.S. exchanges was 14.03 billion shares.
A slide in the big tech stocks that have driven the rally in
equities since pandemic-induced lows of last March continued,
with Apple Inc AAPL.O , Nvidia Corp NVDA.O , Tesla Inc
TSLA.O and Alphabet Inc's Google GOOGL.O leading declining
shares on Nasdaq.
Tech stocks are particularly sensitive to rising yields
because their value rests heavily on earnings in the future,
which are discounted more deeply when bond returns go up.
The divergence between the tech stocks and non-tech stocks
explains trading today, said Joe Saluzzi, partner and co-founder
of Themis Trading in Chatham, New Jersey.
"The stimulus package will be certainly helping the bigger
cap names," Saluzzi said, referring to non-tech stocks. "The
get-out and non-stay at home stocks are doing better now," he
said.
Banks .SPXBK added about 2% as the yield on the benchmark
10-year note US10YT=TWEB stood near a 13-month high, while
airlines .SPCOMAIR jumped about 5%.
Walt Disney Co DIS.N jumped about 6% as California health
officials set new rules that would allow Disneyland and other
theme parks, stadiums and outdoor entertainment venues to reopen
as early as April 1. GameStop Corp GME.N surged about 42% after the company
said it had tapped shareholder Ryan Cohen to lead a transition
to an e-commerce business. Advancing issues outnumbered declining ones on the NYSE by a
1.39-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored decliners.
The S&P 500 posted 124 new 52-week highs and no new lows;
the Nasdaq Composite recorded 405 new highs and 28 new lows.

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GameStop shares surge 53%, other 'meme stocks' rally on stimulus
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