US STOCKS-Wall Street rally pauses as big tech loses steam

* Twitter jumps after signaling rebound in ad spending
* Pot stocks extend rally, attract Reddit army's attention
* U.S. consumer prices increase steadily in Jan
* Indexes: Dow up 0.21%, S&P rises 0.10%, Nasdaq adds 0.05%

(Adds mid-afternoon prices, byline)
By Herbert Lash
Feb 10 (Reuters) - The S&P 500 and the Nasdaq edged slightly
higher after slipping from record levels in volatile trading on
Wednesday, as energy and financials rose but some big tech
stocks limited those gains amid an ongoing rotation of portfolio
holdings.
Remarks by Federal Reserve Chairman Jerome Powell that there
should be no expectation of withdrawing support to the economy
before the coronavirus pandemic is under control appeared to
help lift the S&P 500 slightly into the black. Tesla Inc's TSLA.O 4.6% slide and drops of 1% or less by
Amazon.com Inc's AMZN.O , Microsoft Corp MSFT.O and Apple Inc
AAPL.O weighed the most on the S&P 500 and the Nasdaq.
The consumer discretionary index .SPLRCD , down 1.1%, was
the biggest drag on the S&P, with information technology
.SPLRCT another drag. On the upside, energy .SPNY rose 1.4%
and financials .SPSY gained 0.2%.
A broadening of market leadership is underway with the focus
on big tech easing off and sectors such as energy and financials
gaining traction, said David Bahnsen, chief investment officer
at The Bahnsen Group in Newport Beach, California.
"Is the whole market still reliant on big tech as it clearly
was last summer? I think the answer is increasingly becoming
'no,' you're seeing a broadening of market leadership," Bahnsen
said. "You have over 75% of the S&P 500 trading above its
200-day moving average. That's remarkable breadth."
The Russell 1000 value index .RLV , which is heavily
weighted towards cyclical sectors, rose 0.1%, while its growth
index .RLG , comprising large tech companies, fell 0.2%.
Shares of cannabis companies soared as the Reddit forum that
pushed GameStop to record levels late last month extended a
months-long rally on bets of decriminalization under the
administration of U.S. President Joe Biden. Wall Street's fear gauge .VIX spiked to a one-week high of
23.85 points before paring gains to trade 3.1% higher.
Twitter Inc TWTR.N added about 7.6% after it forecast a
strong start to 2021 as ad spending rebounds from a rock
bottom. The social media platform has thought about whether to hold
bitcoin on its balance sheet, but it has not made any changes
yet, Chief Financial Officer Ned Segal told CNBC. "The big question is sensitivity to valuation," said
Bahnsen, adding that at 23 to 25 times forward earnings there's
no question certain stocks are highly valued.
"We're overbought but there's a lot of sectors that haven't
participated as well ... and rotation into these pockets always
seems to keep this market floating," said Dennis Dick, a
proprietary trader at Bright Trading LLC in Las Vegas.
Bets on more fiscal aid and swift vaccine distribution have
powered the main U.S. stock indexes to a series of all-time
peaks recently.
Biden on Tuesday agreed to a proposal by Democratic
lawmakers to limit or phase out stimulus payments to
higher-income individuals as part of his administration's $1.9
trillion coronavirus relief bill. "The dominating feature to these markets remain low interest
rates, the passage to Biden's package - whether it's as big as
they hoped or whether it's a slightly scaled down version," said
Rick Meckler, a partner at Cherry Lane Investments in New
Vernon, New Jersey.
At 2:38PM ET, the Dow Jones Industrial Average .DJI rose
66.95 points, or 0.21%, to 31,442.78, the S&P 500 .SPX gained
3.75 points, or 0.10%, to 3,914.98 and the Nasdaq Composite
.IXIC added 6.86 points, or 0.05%, to 14,014.56.
Data on Wednesday showed U.S. consumer prices rose
moderately in January but underlying inflation remained benign
amid a pandemic that has fractured the labor market and services
industry. Fourth-quarter earnings have so far also exceeded
expectations, supporting sentiment.
Lyft Inc LYFT.O jumped 5.6% after the ride-hailing firm
said it is chopping costs and now expects to be profitable in
the third quarter. Advancing issues outnumbered decliners by a 1.1-to-1 ratio
on the NYSE and on the Nasdaq.
The S&P 500 posted 44 new 52-week highs and no new low,
while the Nasdaq recorded 576 new highs and 29 new lows.