NEW YORK: US stocks on Tuesday finished mostly lower with the Nasdaq dropping more than 0.5 percent after the Federal Reserve warned that some technology stocks appear to be overvalued.
At the closing bell, the Dow Jones Industrial Average advanced 7.26 points (0.04 percent) to 17,062.68, while the S&P 500 fell 3.53 (0.18 percent) to 1,973.
The biggest losses came in the tech-rich Nasdaq Composite Index, which slumped 24.03 (0.54 percent) to 4,416.39.
Nasdaq fell as low as 4,389.70 earlier in the session after a Fed report to Congress said smaller stocks in social media and biotechnology "appear substantially stretched."
The report was released in conjunction with congressional testimony by Fed Chair Janet Yellen, who said the central bank could implement interest rate increases "sooner and be more rapid than currently envisioned" if labor market conditions continue to improve more than expected.
Art Hogan, chief market strategist at Wunderlich Securities, said Yellen's remarks on interest rates were "different" than what he expected and "sort of got my attention."
Otherwise, Yellen "pretty well stuck to the script," he said, noting that Yellen emphasized that the timeframe on raising rates was entirely data-dependent.
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