* 3M, Lockheed drop on disappointing full-year forecasts
* Google-parent Alphabet sinks on worries of rising costs
* Apple down for 5th straight day on iPhone demand worries
* Amazon, Facebook also down ahead of results
* Indexes down: Dow 0.37 pct, S&P 0.20 pct, Nasdaq 0.60 pct (Changes comment, adds details, updates prices)
By Sruthi Shankar
April 24 (Reuters) - A sharp drop in so-called ‘FAANG’ group of technology stocks pushed the Nasdaq Composite lower on Tuesday, with rising 10-year yields and contrasting earnings reports from industrials also adding to the pressure.
Google-parent Alphabet sank 3.9 percent, erasing all its gains for the year, as investors focused on rising costs at the company rather than the profit beat.
The other FAANG members, which had powered the stock market to record highs, also fell. Facebook declined 2.8 percent, Amazon dropped 2.6 percent and Netflix declined 3.5 percent.
“Given the weakness in Google, you’re seeing profit taking in rest of the FAANG stocks ... a spillover into some of the other tech names,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
“Those five names are enough to weigh on Nasdaq and tech stocks.”
Apple was down 0.8 percent, falling for the fifth straight session as results from its suppliers continue to feed fears of slowing demand for iPhones.
Chipmaker AMS warned of a downturn this quarter owing to weaker orders from a main customer that analysts said was Apple. Corning said it expects weak demand for phone screen glass to spill into the current quarter.
The technology sector sank 0.7 percent, making it the biggest drag on the S&P and Nasdaq.
At 11:54 a.m. EDT the Dow Jones Industrial Average was down 91.18 points, or 0.37 percent, at 24,357.51, the S&P 500 was down 5.34 points, or 0.20 percent, at 2,664.95 and the Nasdaq Composite was down 43.07 points, or 0.60 percent, at 7,085.53.
Adding to nerves, was the yield on the 10-year U.S Treasury bonds hitting 3 percent for the first time since 2014, before easing off, due to a growing supply of government debt and accelerating inflation as commodity prices gained.
Most market strategists said the mark was more a technical or psychological level than anything else.
“These higher Treasury yields are providing competition with riskier fixed-income products and things like REITs and dividend-producing stocks,” said Bill Northey, senior vice president with U.S. Bank Wealth Management in Helena, Montana.
Caterpillar was down about 4 percent, reversing course from earlier in the session after it beat profit estimates and raised its earnings forecast.
Lockheed Martin sank 5.1 percent after the Pentagon’s No.1 weapons supplier failed to raise its outlook for cash flow. 3M dived 7.7 percent after it cut the top end of its full-year forecast.
Nearly a quarter of the S&P 500 companies have reported first-quarter results so far, with 77 percent of them topping profit estimates, according to Thomson Reuters I/B/E/S.
That has pushed up analysts’ estimates for earnings growth in the quarter to about 21 percent, from 18.6 percent just over a week back, making it the strongest in seven years.
Advancing issues outnumbered decliners by a 1.36-to-1 ratio on the NYSE and by a 1.33-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and 17 new lows, while the Nasdaq recorded 54 new highs and 52 new lows. (Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)