* Tech-focused stocks rebound * Banks stocks drop as U.S. bond yields fall from highs * Indexes: Dow down 1.19%, S&P down 0.1%, Nasdaq adds 0.8% (Updates to mid-afternoon, adds new comment, changes byline, adds NEW YORK dateline) NEW YORK Feb 26 (Reuters) - The tech-heavy Nasdaq index partly rebounded on Friday from its worst day in four months in choppy trading, even as sentiment remained fragile, with fears of a rise in inflation keeping U.S. bond yields near a one-year high. The S&P 500 was little changed to slightly lower on the day, while the Dow index fell to a three-week low. The Dow still posted gains of nearly 4% for the month, as investors bought into cyclical companies set to benefit from an economic reopening. Shares of Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Inc edged up between 0.8% and 2.0%, but were headed for their worst week in months. The benchmark 10-year U.S. Treasury yield eased to 1.452% after jumping to 1.614% on Thursday, roiling stock markets. Wall Street’s fear gauge hovered at a one-month high. “I think interest rate pressures have abated...so we’re seeing a little bit of wind in the sails of some of these tech companies which may have been oversold,” said Sal Bruno, chief investment officer at IndexIQ. The major averages were knocked off their all-time highs last week after a sharp rise in U.S. Treasury yields triggered a selloff in some of the mega-cap technology stocks. Tech stocks are particularly sensitive to rising yields because their value rests heavily on future earnings, which are discounted more deeply when interest rates go up. Nasdaq was still up 1.4% for the month despite the recent rout. Financials and energy shares, the best performing S&P sectors this month, slipped about 1.4% and 2.1% on Friday. Technology stocks rose 1% and semiconductor stocks advanced about 2.3%. The S&P 500 value index dropped 0.8% while the growth index rose 0.7% in a reversal of this month’s trend. In mid-afternoon trading, the Dow Jones Industrial Average fell 373.7 points, or 1.19%, to 31,028.31, the S&P 500 lost 3.71 points, or 0.10%, to 3,825.63 and the Nasdaq Composite added 110.49 points, or 0.84%, to 13,229.92. An early surge in the shares of GameStop Corp fizzled and left the video game retailer’s stock down 8% on Friday, throwing water on a renewed rally this week that has left analysts puzzled. On the economic front, latest data showed U.S. consumer spending increased by the most in seven months in January but price pressures remained muted. Stimulus will be back in focus as the Democratic-controlled U.S. House of Representatives aims to pass President Joe Biden’s $1.9 trillion coronavirus aid bill on Friday in what would be the first major legislative victory of his presidency. Salesforce.com Inc dropped 5.5% as the online software company forecast full-year profit below market expectations. Declining issues outnumbered advancing ones on the NYSE by a 1.54-to-1 ratio; on Nasdaq, a 1.46-to-1 ratio favored decliners. The S&P 500 posted 4 new 52-week highs and one new low; the Nasdaq Composite recorded 42 new highs and 47 new lows. (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Devik Jain and Medha Singh in Bengalaru; Editing by Cynthia Osterman)