US STOCKS-Wall Street extends losses as inflation fear lingers

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* Tech-focused stocks rebound
* Energy stocks slip as oil prices slide
* Banks stocks drop as U.S. bond yields ease
* Indexes: Dow down 1.24%, S&P dips 0.67%, Nasdaq down 0.32%

(Updates to market open)
By Devik Jain and Medha Singh
Feb 26 (Reuters) - Wall Street's main indexes extended
losses on Friday as fears of a potential rise in inflation kept
U.S. bond yields around one-year high, while tech stocks clawed
back some losses.
Shares of Amazon.com Inc AMZN.O , Microsoft Corp MSFT.O
and Alphabet Inc GOOGL.O edged up between 0.4% and 1%, but
were headed for their worst week in months.
The benchmark 10-year U.S. Treasury yield US10YT=RR eased
to 1.478% after jumping 1.614% overnight, roiling stock markets.
Wall Street's fear gauge .VIX hovered at a one-month high.
US/
"If rates continue to move that quickly, the markets
wouldn't like that," said Eric Diton, President and Managing
Director at The Wealth Alliance in New York.
"I don't see reasons for panic out there. This is simply a
normal overdue pullback."
The major averages were knocked off their all-time highs
last week after a sharp rise in U.S. Treasury yields triggered a
selloff in some of the mega-cap technology stocks.
Tech stocks are particularly sensitive to rising yields
because their value rests heavily on future earnings, which are
discounted more deeply when bond returns go up.
The Dow is poised for its best month since November 2020 as
investors bought into cyclical companies set to benefit from an
economic reopening, while the Nasdaq remains on track to wipe
out nearly all of its gains for the month.
Financials .SPSY and energy shares .SPNY , the best
performing S&P sectors this month, slipped about 0.2% and 1%.
Technology stocks rose 0.6% and semiconductor stocks advanced
about 1%. O/R
At 10:27 a.m. EST the Dow Jones Industrial Average .DJI
fell 388.66 points, or 1.24% , to 31,013.35, the S&P 500 .SPX
lost 25.56 points, or 0.67 %, to 3,803.78 and the Nasdaq
Composite .IXIC lost 41.33 points, or 0.32 %, to 13,078.10.
Latest data showed U.S. consumer spending increased by the
most in seven months in January but price pressures remained
muted.
Stimulus will be back in focus as the Democratic-controlled
U.S. House of Representatives aims to pass President Joe Biden's
$1.9 trillion coronavirus aid bill on Friday in what would be
the first major legislative victory of his presidency.
GameStop Corp GME.N jumped 11% as retail investors pushed
up the stock in a renewed rally that could see it clock its
second best week. Salesforce.com Inc CRM.N slipped about 1.3% as the online
software company forecast full-year profit below market
expectations. Declining issues outnumbered advancers by a 2.8-to-1 ratio
on the NYSE and by a 3.6-to-1 ratio on the Nasdaq.
The S&P 500 posted one new 52-week high and one new low
while the Nasdaq recorded 26 new highs and 77 new lows.