S&P 500 dips, Nasdaq sinks as investors adjust bets on recovery hopes
By Stephen Culp NEW YORK (Reuters) - The S&P 500 posted a modest loss and the Nasdaq closed sharply lower on Tuesday as promising news regarding 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, gained ground and crude oil prices extended the previous session's surge as investors bet on a demand rebound. Pfizer Inc 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
By Stephen Culp
NEW YORK (Reuters) - The S&P 500 posted a modest loss and the Nasdaq closed sharply lower on Tuesday as promising news regarding 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, gained ground and crude oil prices extended the previous session's surge as investors bet on a demand rebound.
The development led to investors taking profits from market-leading tech stocks that have thrived amid the pandemic recession, a sell-off which pulled the tech-heavy Nasdaq deep into red territory.
"Equity markets in the U.S. have experienced the start of a significant rotation following the vaccine announcement," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "It's been a dramatic change and it's all in anticipation of returning to some form of economic normalcy once the vaccine has been distributed to the broad population."
"The caveat is there's a second wave to the virus that's infecting a record number of people," Ghriskey added. "But at least for now the markets are willing to look through that economic pain to better days ahead once the virus has been eradicated."
Uncertainties from Washington still simmer in the background as President Donald Trump continued to press for investigations of election fraud following his defeat by Democrat challenger Joe Biden.
"The circus going on in DC which is causing concern about a smooth transition of administrations in the months ahead," Ghriskey said. "The flames coming out of Washington are unrelenting and constant."
The Dow Jones Industrial Average <.DJI> rose 262.95 points, or 0.9%, to 29,420.92, the S&P 500 <.SPX> lost 4.97 points, or 0.14%, to 3,545.53 and the Nasdaq Composite <.IXIC> dropped 159.93 points, or 1.37%, to 11,553.86.
European shares extended their gains on lingering vaccine optimism and news that EU negotiators have agreed on a budget, a crucial step toward activating the bloc's 1.8 trillion euro recovery package.
The pan-European STOXX 600 index <.STOXX> rose 0.90% and MSCI's gauge of stocks across the globe <.MIWD00000PUS> %.
Emerging market stocks lost 1.16%. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 0.69% lower, while Japan's Nikkei <.N225> rose 0.26%.
U.S. Treasury yields inched lower on Tuesday in choppy trading, consolidating the previous session's gains due to economic optimism in the wake of positive news on a potential coronavirus vaccine.
Benchmark 10-year notes
The 30-year bond
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.
The dollar held its ground against a basket of currencies and the yen hovered near three-week lows as the forex markets absorbed Monday's big moves due to vaccine developments.
The dollar index <.DXY> rose 0.08%, with the euro
The Japanese yen strengthened 0.08% versus the greenback at 105.30 per dollar, while Sterling
Gold regained some ground lost in Monday's plunge expectations of fiscal and monetary stimulus offered support to the safe-haven metal.
(Reporting by Stephen Culp; additional reporting by Marc Jones; Editing by Tom Brown)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.