US STOCKS-Stocks slide as stimulus, infrastructure costs spook investors

* Stocks turn sharply lower late in session
* GameStop drops ahead of quarterly results

(Adds 4 p.m. close)
By Herbert Lash
NEW YORK, March 23 (Reuters) - U.S. stocks tumbled on
Tuesday as concerns about the cost of infrastructure spending
and potential tax hikes to pay for President Joe Biden's $1.9
trillion relief bill weighed on investors who also fear further
downside in the market.
Remarks by Treasury Secretary Janet Yellen that the U.S.
economy remains in crisis from the pandemic as she defended
developing plans for future tax increases to pay for the new
public investments put investors on alert. Yellen spoke at a hearing of the House Financial Services
Committee after Federal Reserve Chair Jerome Powell addressed
the committee.
Talk of the government's infrastructure plans unnerved
investors who are concerned the stock market is trading at
elevated valuations, said Rick Meckler, partner at Cherry Lane
Investments in New Vernon, New Jersey.
"There's a little bit of concern of getting out ahead of a
potential selloff that could be on the horizon," Meckler said.
Stocks had been trading near break-even in choppy trade
before turning sharply lower about 45 minutes before the close.
Powell told U.S. lawmakers that a coming round of
post-pandemic price hikes will not fuel a destructive breakout
of persistent inflation - fears that had sparked a recent rise
in yields. Oil prices that slumped more than 3% on worries that new
pandemic curbs and slow vaccine rollouts in Europe will slow a
recovery in demand also pushed the energy sector lower. O/R
Falling yields on 10-year U.S. Treasury notes from a
14-month highs last week have deflated this year's
outperformance in the financial .SPSY and energy .SPNY
sectors.
Conversely, technology-related shares that had recently
declined sharply on the rising rate environment have recuperated
a bit as yields eased, said Peter Tuz, president of Chase
Investment Counsel in Charlottesville, Virginia.
"A lot of these (tech) stocks have seen 10% to 20%
corrections and interest rates have backed off a bit," Tuz said.
"The money seems to be going back into them and out of the
groups that did extremely well the last three months,
specifically financials and energy."
The benchmark S&P 500 and the blue-chip Dow have rallied
about 80% from their pandemic lows of a year ago, while the
tech-heavy Nasdaq more than doubled in value.
The CBOE volatility index .VIX eased to its lowest level
in 13 months before jumping about 11% on the day. Wall Street's
so-called fear gauge still hovers near pandemic lows.
Unofficially, the Dow Jones Industrial Average .DJI fell
308.77 points, or 0.94%, to 32,422.43, the S&P 500 .SPX lost
30.16 points, or 0.77%, to 3,910.43 and the Nasdaq Composite
.IXIC dropped 149.85 points, or 1.12%, to 13,227.70.
Shares of GameStop Corp GME.N dropped ahead of the
company's fourth-quarter results due after markets close. The
videogame retailer announced the exit of its chief customer
officer in the latest sign of a broader overhaul into an
e-commerce firm. ViacomCBS Inc VIAC.O tumbled after the media firm launched
$3 billion stock deals to raise capital for investments in
streaming. U.S.-listed shares of Chinese internet search provider Baidu
Inc BIDU.O slid following a flat Hong Kong debut as investors
were wary of a fundraising flurry in the city and questioned the
company's growth plans.