Wall Street down on profit booking in tech sector

Tech stocks have led a record-setting rally, helped largely by strong quarterly earnings

The Nasdaq Composite and the S&P 500 were lower on Monday as a bout of profit-taking squeezed the richly-valued technology sector.

Technology stocks have led a record-setting rally on Wall Street, helped largely by strong quarterly earnings. The S&P 500 technology index has risen 18.5 per cent this year and is on track to register its best yearly performance since 2014.

However, the index tumbled 2.7 per cent on Friday, sparked by a sharp drop in Apple shares amid reports that the company is using slower modems in upcoming iPhones, compared with those used by rivals.

Shares of the world's most valuable publicly-listed company were off 3.5 per cent at $143.52 on Monday and weighed the most on all three main indexes.

The S&P technology sector was down 1.34 per cent due to declines in closely watched technology stocks, including those of Microsoft, Facebook, Netflix and Alphabet.

"We're starting to question valuations of technology (stocks) at these levels and investors are trying to jockey their way around this thought process," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

Wall Street's major indexes hit all-time highs on Friday, driven by banks and energy stocks but those gains were offset by the tech selloff later in the day.

Financials rose 0.5 per cent on Monday, while energy was up 1.3 per cent, helping cushion some of the impacts from the tech rout.

At 9:40 am ET (13:40 GMT), the Dow Jones Industrial Average was down 16.93 points, or 0.08 per cent, at 21,255.04.

The S&P 500 was down 5.2 points, or 0.21 per cent, at 2,426.57 and the Nasdaq Composite was down 62.95 points, or 1.01 per cent, at 6,144.97.

Shares of GE rose 4.8 per cent to $29.29 after the company said Jeff Immelt would retire as chief executive and would be replaced by John Flannery, the head of GE Healthcare, ending a years-long succession plan. GE was the top stock on the S&P 500.

Coherus BioSciences tumbled 30.2 per cent to $14.40 after the Food and Drug Administration (FDA) denied the approval of its biosimilar for Amgen's Neulasta, which fights infections in cancer patients. Amgen was up 1.5 at $166.61.

Advancing issues outnumbered decliners on the NYSE by 1,635 to 954. On the Nasdaq, 1,206 issues rose and 1,166 fell.

The S&P 500 index showed 28 new 52-week highs and 11 new lows, while the Nasdaq recorded 82 new highs and 70 new lows.