Fed report sends Nasdaq lower, Dow edges higher

US stocks on Tuesday finished mostly lower with the Nasdaq dropping more than 0.5 per cent after the Federal Reserve warned that some technology stocks appear to be overvalued. The Dow Jones Industrial Average inched up 5.26 points (0.03 per cent) to 17,060.68 points, while the S&P 500 fell 3.82 (0.19 per cent) to 1,973.28. The biggest losses came in the tech-rich Nasdaq Composite Index, which slumped 24.03 (0.54 per cent) 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 labour market conditions continue to improve more than expected. Leading technology and biotech names dropped, including Amgen (-1.8 per cent), Biogen (-2.4 per cent), Facebook (-1.1 per cent), Tesla Motors (-3.1 per cent) and Yelp (-2.9 per cent). Nasdaq heavyweight Apple dropped 1.2 per cent, according to AFP.