Nasdaq drops as investors shun techs for financials

The Nasdaq Composite index fell more than 1 percent in midday trade on Wednesday as investors sold off technology stocks and moved into financials that have gained on strong economic data and comments from Fed officials on future rate hikes.

The high-flying FAANG stocks - Facebook, Amazon, Apple, Netflix and Google parent Alphabet - fell between 2.3 percent and 5.3 percent.

JPMorgan climbed 2.5 percent and Bank of America rose 2.7 percent, putting the S&P financial index on track for its best two-day gains in more than a year.

Fed chair Janet Yellen said on Wednesday that a strengthening economy would warrant continued rate increases. The comments come a day after Fed chair nominee Jerome Powell said that the case for a December rate hike was coming together and also hinted at lighter bank regulation.

"What we're seeing is a combination of defense positioning, with people taking some profit out of the high-growth areas, technology specifically, and rotating into sectors that should hold up better if we get any negative news on tax bill or the debt ceiling," said Jonathan Mackay, investment strategist at Schroders.

With financial stocks, investors may be adjusting expectations to catch up with the Fed (on interest rate hikes), Mackay said.

The second revision of third-quarter gross domestic product showed growth increased at a 3.3 percent annual rate, up from the previously reported 3 percent.

U.S. 10-year note and 30-year bond yields climbed to two-week peaks on the data and the encouraging comments.

Investors are also watching out for progress on the U.S. tax bill. Senate Republicans on Tuesday rammed forward the bill, which corporate America is hoping will slash business tax rates, in an abrupt, partisan committee vote that set up a full vote by the Senate as soon as Thursday.

At 11:03 a.m. ET (1503 GMT), the Dow Jones Industrial Average was up 92.23 points, or 0.39 percent, at 23,928.94, the S&P 500 was up 0.32 points, or 0.01 percent, at 2,627.36 and the Nasdaq Composite was down 76.41 points, or 1.11 percent, at 6,835.94.

Chipotle Mexican Grill gained 4 percent after the burrito chain said it would seek a turnaround expert to replace founder Steve Ells as chief executive.

Allergan rose 4.15 percent after Morgan Stanley upgraded the company's stock to "overweight".

Autodesk was the biggest loser on S&P 500, slumping more than 16 percent after the AutoCAD maker's revenue forecast fell below estimates and said it expected restructuring charges.

Advancing issues outnumbered decliners on the NYSE by 1,467 to 1,340. On the Nasdaq, 1,478 issues rose and 1,270 fell.