Global Markets: The S&P 500 drops, crude gains on upbeat vaccine news, recovery hopes

By Stephen Culp NEW YORK (Reuters) - The S&P 500 and the Nasdaq lost ground on Tuesday and crude oil prices extended the previous session's surge as encouraging prospects of an effective COVID-19 vaccine led investors away from market leaders and toward cyclical stocks associated with economic recovery. The blue-chip Dow, buoyed by industrial shares, was modestly higher and crude advanced as investors bet on rebounding demand. Pfizer Inc's announced on Monday that its COVID-19 vaccine candidate, developed with German partner BioNTech, showed in trials it had a 90% success rate in preventing infection

Reuters November 11, 2020 00:06:08 IST
Global Markets: The S&P 500 drops, crude gains on upbeat vaccine news, recovery hopes

Global Markets The SP 500 drops crude gains on upbeat vaccine news recovery hopes

By Stephen Culp

NEW YORK (Reuters) - The S&P 500 and the Nasdaq lost ground on Tuesday and crude oil prices extended the previous session's surge as encouraging prospects of an effective COVID-19 vaccine led investors away from market leaders and toward cyclical stocks associated with economic recovery.

The blue-chip Dow, buoyed by industrial shares, was modestly higher and crude advanced as investors bet on rebounding demand.

Pfizer Inc's announced on Monday that its COVID-19 vaccine candidate, developed with German partner BioNTech, showed in trials it had a 90% success rate in preventing infection.

The development led to investors taking profits from market-leading tech stocks that have thrived amid the pandemic recession.

But some investors pondered whether the rotation was premature.

"This action your seeing in tech is a sinking ship and the rats are running to the other end," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "I'm amazed by this massive rotation out of what's worked so well in the economic shutdown.

"We've gone through these rotations from growth to value only to it see it fade out real quickly," Pavlik added. "People are saying it's different this time but how many times have we heard that?"

The Dow Jones Industrial Average rose 139.28 points, or 0.48%, to 29,297.25, the S&P 500 lost 20.44 points, or 0.58%, to 3,530.06 and the Nasdaq Composite dropped 212.66 points, or 1.82%, to 11,501.13.

Optimism over a potential vaccine breakthrough helped keep European shares near eight-month highs, but gains were held in check by growing concerns about the depth of economic damage wrought by the pandemic.

The pan-European STOXX 600 index rose 0.81% and MSCI's gauge of stocks across the globe shed 0.28%.

Emerging market stocks lost 1.26%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.81% lower, while Japan's Nikkei rose 0.26%.

U.S. Treasury yields slipped on Tuesday in choppy trading, pulling back from steep gains the previous session. But the direction for rates has turned higher amid optimism about the economy with the positive news on a potential coronavirus vaccine.

Benchmark 10-year notes last rose 3/32 in price to yield 0.9476%, from 0.958% late on Monday.

The 30-year bond last rose 11/32 in price to yield 1.7351%, from 1.751% late on Monday.

Oil prices extended Monday's surge, which gave the commodity its biggest daily percentage gain in five months, as views of a possible medical solution to the pandemic outweighed sagging demand from new lockdowns to contain the virus.

U.S. crude rose 1.51% to $40.90 per barrel and Brent was last at $42.94 per barrel, up 1.27% on the day.

Vaccine hopes also helped the dollar inch up against a basket of currencies, as investors quit long positions in other safe-haven currencies such as the Japanese yen and the Swiss franc.

The dollar index rose 0.04%, with the euro up 0.03% to $1.1817.

The Japanese yen strengthened 0.09% versus the greenback at 105.28 per dollar, while Sterling was last trading at $1.3225, up 0.47% on the day.

Gold regained some ground lost in Monday's plunge as market participants bet on continued monetary support from central banks.

Spot gold added 1.1% to $1,882.80 an ounce.

(Reporting by Stephen Culp; additional reporting by Marc Jones; Editing by Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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