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Indexes down: Dow 0.52%, S&P 500 0.93%, Nasdaq 1.34%

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Netflix ( NFLX ) down on JPM analyst focus list removal

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Blackstone infrastructure unit to acquire TXNM Energy ( TXNM )

(Updates after markets open)

By Shashwat Chauhan and Kanchana Chakravarty

May 19 (Reuters) - Wall Street's main indexes slipped on

Monday, with technology stocks falling as Treasury yields spiked

after Moody's downgraded the U.S. sovereign rating, sharpening

focus on its mounting debt.

Moody's cut the United States' sovereign credit rating to

"Aa1" from "Aaa" late on Friday owing to concerns about its

ballooning $36-trillion debt, becoming the last of the three

major credit rating agencies to downgrade the country. It had

first given the U.S. its pristine "Aaa" rating in 1919.

"Nothing new, but it's putting a lot of things that the

market has worried about rightfully back into focus," said Ross

Mayfield, investment strategist at Baird.

"The trade headwinds keep markets volatile, but this morning

in particular, it's about the Moody's downgrade."

Worries about the ever-increasing U.S. deficit were front

and center as U.S. President Donald Trump's sweeping tax-cut

bill - which Republican infighting over spending cuts had

stalled for days - won approval from a key congressional

committee on Sunday.

At 09:35 a.m. ET, the Dow Jones Industrial Average

fell 222.40 points, or 0.52%, to 42,432.34, the S&P 500

lost 55.42 points, or 0.93%, to 5,902.96, and the Nasdaq

Composite lost 257.49 points, or 1.34%, to 18,953.61.

Ten of the 11 S&P sub-sectors fell, with consumer

discretionary and energy being the worst

performers.

Highly valued technology stocks took a hit as rising

rates tend to discount the present value of future profits.

Tesla led losses among megacap and growth stocks with a

4.1% fall.

Chip stocks also sold off. Nvidia ( NVDA ) was down 1.4% and

a gauge for semiconductor stocks shed 1.9%.

Yields on U.S. government bonds - which move inversely to

prices - ticked higher, with the 10-year note rising

9 basis points to 4.526% and the 30-year note

touching 4.998%.

The S&P 500 had registered its fifth straight day of

gains on Friday, closing out the week with firm gains as markets

took heart from a temporary tariff truce between the U.S. and

China along with tame inflation data.

U.S. Treasury Secretary Scott Bessent said in television

interviews over the weekend that Trump would impose tariffs at

the rates he had threatened last month on trading partners that

do not negotiate deals in "good faith".

The U.S. Federal Reserve might only be able to cut interest

rates by a quarter point through the rest of the year, Atlanta

Fed president Raphael Bostic said, while New York Fed President

John Williams said that the interest-rate policy was in the

right place to deal with an uncertain economic outlook.

In other moves, Netflix ( NFLX ) fell almost 1% after

J.P.Morgan removed the stock from its U.S. analyst focus list.

TXNM Energy ( TXNM ) jumped 7.6% after the utility said it

would be acquired by the infrastructure unit of Blackstone

in an $11.5-billion deal.

Declining issues outnumbered advancers by a 5.98-to-1 ratio

on the NYSE, and by a 2.91-to-1 ratio on the Nasdaq.

The S&P 500 posted three new 52-week highs and no new lows,

while the Nasdaq Composite recorded 10 new highs and 23 new

lows.