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Wall Street fell sharply on Thursday with the S&P 500 and Dow industrials on track for their worst daily drops in six weeks as investors continued a recent move out of technology shares.

The technology sector. SPLRCT, which has led the S&P 500’s 8-percent gain for the year, dropped 2.1 percent and were the worst-performing major group. Declines in big tech stocks, including Apple (AAPL.O) and Microsoft (MSFT.O), weighed the most on the benchmark S&P.

Financials .SPSY and energy. SPNY were the only sectors in positive territory as investors may have been rotating into groups that have lagged this year.

“U.S. equities have remained extended, at or close to record territory for an extended period of time really without a tremendous amount of conviction in the market,” said Peter Kenny, senior market strategist at Global Markets Advisory Group, in New York.

“It’s really been treading water. Without a major stimulus to drive prices higher, equities have to reset and that’s what they’re doing today,” Kenny said.

Equity investors also may be concerned about the rise in interest rates globally, with European stocks also falling.

With the second quarter coming to a close, the market has experienced a volatile few days. Just on Wednesday, the tech-heavy Nasdaq had posted its best day since Nov. 7, and tech remains the best-performing sector this year.

“Large-cap tech and software are extended on a valuation basis,” Kenny said. “The opposite is the case in financials and in energy.”

Financials were the bright spot for the stock market, rising 0.8 percent.

Bank stocks gained after the U.S. Federal Reserve approved the banks’ plans to raise dividend payouts and share buybacks under its annual stress test program. Wells Fargo (WFC.N)

shares rose 2.6 percent while Citigroup (C.N) gained 3.3 percent.

Update on the Fed:

As we head into the Independence Day Holiday and a new month we can revisit http://glblmkt.com/us-economy-to-federal-reserve-take-it-easy

Investors have been concerned about tepid data about U.S. economic growth as the Fed is raising interest rates from very low levels.
Data showed the U.S. economy slowed less sharply in the first quarter than initially estimated due to unexpectedly higher consumer spending and a bigger jump in exports.The Fed can go it alone on monetary policy among global central banks but strong data is needed for that to continue, St. Louis Federal Reserve chief James Bullard said.

Commentary featured in Reuters: http://www.reuters.com/article/usa-stocks-idUSL1N1JQ1LX by Lewis Krauskopf

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