US STOCKS-Nasdaq roars back as tech stocks gain ground

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* Rally in bank stocks cool as bond yields ease
* GameStop builds on Monday's 40% surge
* Indexes up: Dow 0.53%, S&P 1.49%, Nasdaq 3.17%

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By Shashank Nayar and Medha Singh
March 9 (Reuters) - U.S. stocks advanced on Tuesday, with
the Nasdaq jumping over 3% to recoup its losses in the previous
session as U.S. bond yields retreated and investors picked up
battered technology stocks.
Among the biggest boosts to the S&P 500 and the Nasdaq were
Tesla Inc TSLA.O , Apple Inc AAPL.O , Amazon.com Inc AMZN.O ,
Facebook Inc FB.O and Microsoft Corp MSFT.O jumped between
2.4% and 7.2% after sharp losses in recent weeks as a rise in
yields raised concerns over their high valuations.
Signs that a $1.9 trillion coronavirus relief package was
closing in on final approval sparked a spike in yields on
Monday, pushing the tech-heavy Nasdaq to end more than 10% below
its Feb. 12 closing high that confirmed a correction.
U.S. 10-year Treasury bond yields US10YT=RR eased to 1.54%
after hovering near 13-month highs of 1.613% in the prior
session. Longer-dated yields have jumped over the last month as
investors price in a faster-than-expected economic rebound and
higher inflation.
Higher yields can weigh even more on tech and growth stocks
with lofty valuations, as they threaten to erode the value of
their longer-term cash flows.
"Tech stocks are overdue for some kind of bounce after the
downfall they have had so far with most investor maintaining a
positive outlook (on them) in the medium to longer term," said
Michael Sheldon, chief investment officer at RDM Financial in
Westport, Connecticut.
"Potential headwind for the market is if interest rates rise
further from this point over the short period... since they have
risen too fast in too little time."
At 9:59 a.m. ET, the Dow Jones Industrial Average .DJI
rose 168.01 points, or 0.53%, to 31,970.45, the S&P 500 .SPX
gained 57.06 points, or 1.49%, to 3,878.41 and the Nasdaq
Composite .IXIC gained 399.55 points, or 3.17%, to 13,008.71.
The rise in yields has accelerated a rotation from
"stay-at-home" winners to stocks primed to benefit from an
economic reopening, helping the blue-chip Dow .DJI hit an
intraday record high on Monday. The global economic outlook has brightened as vaccine
rollouts gain speed and the United States launches a massive new
stimulus package, the Organisation for Economic Cooperation and
Development said, hiking its 2021 growth forecasts. The U.S. House of Representatives could approve the relief
bill as early as Tuesday, with a vote allowing the Democratic
president to sign the legislation into law later this week.
The bank index .SPXBK dropped 2% after vaulting to a new
14-year peak. Financials .SPSY and energy .SPNY sectors were
in the red.
GameStop GME.N was up 18%, building on Monday's rise of
over 40% on the video retailer's e-commerce strategy and
speculation that small investors will pour stimulus checks into
markets. Advancing issues outnumbered decliners by a 2-to-1 ratio on
the NYSE and by a 3.2-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and no new low,
while the Nasdaq recorded 131 new highs and eight new lows.