Tech weakness, trade jitters hit S&P, Nasdaq

By Sruthi Shankar

(Reuters) - The S&P 500 and the Nasdaq dropped on Thursday, as internet stocks faltered for a second day on concerns about increased regulation, while Micron led a decline in chip stocks.

Declines in technology stocks come after Facebook and Twitter executives defended their companies before skeptical U.S. lawmakers on Wednesday and the U.S. Department of Justice said it would discuss concerns that social media platforms are "intentionally stifling the free exchange of ideas".

Facebook fell 2.1 percent, Twitter dropped 2.1 percent, Alphabet slipped 2 percent and Snap was down 2.1 percent.

Micron Technology dropped 7.6 percent after brokerage Baird raised concerns over prices of DRAM chips and oversupply of NAND chips.

The Philadelphia SE Semiconductor index fell 1.9 percent.

Investors were keeping an eye on trade developments, with a public comment period on the Trump administration's plan for fresh China tariffs ending on Thursday.

China has warned of retaliation if Washington implements any new tariff measures. Recent reports have said U.S. President Donald Trump is ready to move ahead with tariffs on $200 billion in Chinese imports.

Markets also focused on the North American Free Trade Agreement negotiations, which Canadian Foreign Minister Chrystia Freeland said on Wednesday continued to be "constructive".

Trade concerns have been a drag on U.S. stocks since early this year as investors worry that a global trade war could dent business investment and growth.

Craig Erlam, a senior market analyst at Oanda, wrote in a research note the latest move on China "would represent a significant ramping up of the trade war and show the U.S. electorate ahead of the mid-terms that he (Trump) will not shy away from his strategy, regardless of the warnings against doing so."

At 10:19 a.m. ET the Dow Jones Industrial Average was up 25.69 points, or 0.10 percent, at 26,000.68, the S&P 500 was down 6.98 points, or 0.24 percent, at 2,881.62 and the Nasdaq Composite was down 48.52 points, or 0.61 percent, at 7,946.66.

Seven of the 11 major S&P sectors were higher, led by gains in materials and industrial shares.

Netflix rose 2.3 percent after RBC raised price target on the stock and a survey by the brokerage showed higher penetration levels in the United States and United Kingdom.

Advancing issues outnumbered decliners for a 1.13-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.16-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and 8 new lows, while the Nasdaq recorded 58 new highs and 27 new lows.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)