US STOCKS-Tech stocks lift S&P 500, Nasdaq as Fed meeting kicks off

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* Apple biggest boost to S&P 500, Nasdaq
* Retail sales drop more than expected in Feb
* Indexes: Dow down 0.34%, S&P up 0.11%, Nasdaq up 0.76%

(Updates to market open)
By Medha Singh and Shashank Nayar
March 16 (Reuters) - The S&P 500 hit an all-time high on
Tuesday while the Nasdaq touched a two-week peak as technology
stocks caught a bid ahead of the Federal Reserve's two-day
policy meeting.
The Nasdaq rose 0.7%, extending a rebound in tech-related
stocks that were at the heart of February's selloff. The index
is now about 4% below its Feb. 12 record closing high.
Apple Inc AAPL.O rose 1.4% as Evercore ISI hiked its price
target on the iPhone maker's shares to the highest on Wall
Street. Other mega-cap stocks including Facebook Inc FB.O ,
Netflix Inc NFLX.O , Alphabet Inc GOOGL.O and Microsoft
MSFT.O rose between 1% and 1.7%.
The Dow slipped on Tuesday after notching sixth consecutive
intraday record highs as optimism over a $1.9 trillion fiscal
stimulus package and ongoing vaccination drives bolstered views
that the economy was on a path to recovery.
Scores of stimulus and improving economic data have stoked
inflation worries, pushing up yields and upending equity markets
in February.
Wall Street's fear gauge .VIX hit a five-week low at 19.68
points as yields on the benchmark U.S. 10-year Treasury
US10YT=RR slipped for the second straight session to 1.59%
from a 13-month high hit last week.
"Focus continues to be on longer-end Treasuries as the
market factors in the possibility of the 10-year yield hitting
2%," said Robert Pavlik, senior portfolio manager at Dakota
Wealth in New York.
Fears about an overheating economy and a jump-forward in
interest rate have increased scrutiny on the Fed meeting, where
policymakers are likely to raise economic forecasts and repeat
their pledge to remain accommodative for the foreseeable future.
Investors have slightly increased their cash allocation,
deeming that inflation and 'taper tantrums' could topple the
record rally in financial markets, BofA's March fund manager
survey showed on Tuesday. Latest data showed retail sales dropped more than expected
in February due to bitterly cold weather across the country but
a rebound is likely. Another report indicated winter storms in
Texas led to a plunge in U.S. factory output last month.
At 10:07 a.m. ET, the Dow Jones Industrial Average .DJI
fell 112.00 points, or 0.34%, to 32,841.46, the S&P 500 .SPX
gained 4.45 points, or 0.11%, to 3,973.39 and the Nasdaq
Composite .IXIC gained 102.93 points, or 0.76%, to 13,562.64.
Energy stocks .SPNY slumped about 3% on a drop in oil
prices while financials .SPNY retreated about 1.4%. Technology
.SPLRCT and communication services .SPLRCL jumped over 1%
each.
The Russell growth index .RLG climbed 0.9% versus the
Russell value index's .RLV 0.4% fall, in a slight reversal of
recent trend away from technology and other high-growth stocks.
Ford Motor Co F.N dropped about 3% after announcing a $2
billion convertible debt deal. Declining issues outnumbered advancers by a 1.7-to-1 ratio
on the NYSE and by a 1.6-to-1 ratio on the Nasdaq.
The S&P 500 posted 70 new 52-week highs and no new low,
while the Nasdaq recorded 272 new highs and 29 new lows.