* Weekly jobless claims fall
* Biden calls jobless claims report economic progress
* Nike skids on social media fallout over Xinjiang statement
* Dow up 0.30%, S&P 500 up 0.23%, Nasdaq down 0.18% (Adds mid-afternoon prices)
NEW YORK, March 25 (Reuters) - The Nasdaq slid on Thursday as investors sold technology shares and bought underpriced stocks likely to do well on expectations the U.S. economy grows at its fastest pace in decades this year.
President Joe Biden called news that the number of Americans claiming unemployment insurance had dropped significantly as shown in a Labor Department jobless claims report economic progress, but investors mostly shrugged it off.
Claims for unemployment benefits dropped to a one-year low last week, a sign that the U.S. economy is on the verge of stronger growth as the public health situation improves and temperatures rise with the start of spring.
An end-of-quarter rebalancing of investment portfolios by institutional investors added to another seesaw session of the major Wall Street indexes rising and falling amid the ongoing rotation from growth into so-called value stocks.
Five of the 11 S&P sectors fell, led by the communication services and technology indexes that hold some of the best-performing stocks of 2020, including Microsoft Corp, Amazon.com Inc and Netflix Inc.
A reverse correlation between the Dow and the Nasdaq has occurred already far more this year than in a typical full year, said David Bahnsen, chief investment officer at the Bahnsen Group in Newport Beach, California.
“Any reverse correlation between the Dow and Nasdaq is pretty embedded right now, and I expect it will continue,” Bahnsen said. “There is ongoing rotation out of tech, there’s ongoing de-risking for some of the small caps.”
The Nasdaq Composite has fallen in March after four straight months of gains as rosy economic projections lifted demand for undervalued cyclical stocks, but also raised fears of higher inflation as seen in the jump in 10-year Treasury yields.
The rapid rise in the 10-year not bearish but rather a bullish indicator, Bahnsen said.
“It is happening because we’re vaccinating, it is happening as the economy reopens, it is happening because we’re going to get a really big, high single-digit GDP number this year,” he said.
Heavyweight technology stocks Facebook Inc, Google parent Alphabet Inc and Twitter Inc slipped about 1% ahead of their chief executives’ testimony before Congress about extremism and misinformation on their services.
By 2:48 p.m. EDT, the Dow Jones Industrial Average rose 98.61 points, or 0.3%, to 32,518.67, the S&P 500 gained 9.04 points, or 0.23%, to 3,898.18 and the Nasdaq Composite dropped 23.25 points, or 0.18%, to 12,938.64.
The CBOE volatility index was up for a third straight day after briefly falling to its pre-pandemic lows earlier this week.
Energy stocks shed 1%, tracking lower crude prices.
Utilities, consumer staples and real estate stocks - perceived as safer during times of economic uncertainty - were among the few gainers on the day.
Shares of Nike Inc fell 4.1% as the sporting goods giant faced a Chinese social media backlash over its comments about reports of forced labor in Xinjiang.
Darden Restaurants Inc added 6.9% after it announced a new share buyback plan and forecast upbeat fourth-quarter revenue and profit.
Advancing issues outnumbered declining ones on the NYSE by a 1.23-to-1 ratio; on Nasdaq, a 1.25-to-1 ratio favored advancers.
The S&P 500 posted 10 new 52-week highs and no new lows; the Nasdaq Composite recorded 23 new highs and 158 new lows.
Reporting by Herbert Lash in New York Additional reporting by Devik Jain in Bengaluru Editing by Sagarika Jaisinghani and Matthew Lewis