(Fixes typo in headline)
* Wells Fargo falls after Fed’s unprecedented action
* Qualcomm falls on report of Apple dumping co in favor of Intel
* Apple top boost on all three major indexes
* Dow off 0.06 pct, S&P flat, Nasdaq up 0.31 pct
By Tanya Agrawal
Feb 5 (Reuters) - U.S. stocks pared losses to trade little changed in late morning trading on Monday as a rise in bond yields paused and technology stocks gained.
U.S. Treasury yields recovered from almost four-year highs reached overnight as investors weighed whether a dramatic week-long selloff had run its course.
Benchmark 10-year note yield surged to 2.885 percent overnight, the highest since January 2014, but fell back to 2.841 percent in morning trading.
Rising bond yields mean higher borrowing cost for companies and an alternative investment option for traders.
Wall Street’s three major indexes logged their biggest weekly losses in two years on Friday after a strong payrolls report.
The S&P 500 and the Dow saw their worst weeks since early January 2016 while the Nasdaq recorded its worst week since early Feb 2016.
It was also the biggest daily point fall in the Dow since December 2008 during the financial crisis.
“I think what’s happening right now can be compared to early 2016 where we saw a pullback that was confidence related rather than fundamental and we saw it reverse fairly quickly,” said Brad McMillan, chief investment officer for Commonwealth Financial.
“Seeing the 10-year break multi-year highs and the fact that it happened quickly made the market realize there are some real risks out there.”
Shares of Apple rose 1.7 percent and were the biggest boost to all the three major indexes. The tech sector was the biggest gainer with a 0.62 percent rise.
At 10:49 a.m. ET (1549 GMT), the Dow Jones Industrial Average was down 14.92 points, or 0.06 percent, at 25,506.04, the S&P 500 was down 0.24 points, or 0.008 percent, at 2,761.89.
The Nasdaq Composite was up 22.22 points, or 0.31 percent, at 7,263.16.
Friday’s U.S. payrolls report showed wages growing at their fastest pace in more than eight years, fueling concerns that both inflation and interest rates would rise faster than expected.
Currently, traders are pricing in three rate hikes for 2018, but if the economy and corporate earnings continue to improve, the chances of a fourth increase becomes more likely.
“I think we could see four rate hikes in 2018 but at the same time you have to look at why they’re raising rates. They’re doing that in response to faster economic growth,” McMillan said.
Seven of the 11 major S&P sectors were lower, with the energy index’s 0.89 percent fall leading the decliners.
Wells Fargo fell 7.2 percent after the Fed imposed new regulatory restrictions over compliance issues.
Qualcomm fell 2.3 percent after KGI Securities said Apple might drop the chipmaker in favor of Intel as the supplier for modem chips in its next generation of iPhones. Shares of Intel rose 2.3 percent.
Declining issues outnumbered advancers on the NYSE by 1,766 to 1,077. On the Nasdaq, 1,648 issues fell and 1,163 advanced.
The S&P 500 index showed 1 new 52-week high and 7 new lows, while the Nasdaq recorded 15 new highs and 87 new lows. (Reporting by Tanya Agrawal; Editing by Arun Koyyur)