S&P 500, Nasdaq drop as investors ditch heavyweight tech stocks

By Medha Singh and Shivani Kumaresan (Reuters) - The S&P 500 dropped on Tuesday as excitement over signs of a first successful late-stage COVID-19 vaccine trial faded, while investors continued to pull money out of the big tech companies that have benefited most from the pandemic. Netflix Inc, Amazon.com Inc, Facebook Inc and Microsoft Corp, which have flourished from this year's work-from-home shift and powered Wall Street to new heights, extended Monday's losses and pulled the tech-heavy Nasdaq down about 1%

Reuters November 11, 2020 00:06:32 IST
S&P 500, Nasdaq drop as investors ditch heavyweight tech stocks

SP 500 Nasdaq drop as investors ditch heavyweight tech stocks

By Medha Singh and Shivani Kumaresan

(Reuters) - The S&P 500 dropped on Tuesday as excitement over signs of a first successful late-stage COVID-19 vaccine trial faded, while investors continued to pull money out of the big tech companies that have benefited most from the pandemic.

Netflix Inc, Amazon.com Inc, Facebook Inc and Microsoft Corp, which have flourished from this year's work-from-home shift and powered Wall Street to new heights, extended Monday's losses and pulled the tech-heavy Nasdaq down about 1%.

The tech, communication services and consumer discretionary indexes dropped 1% each, as investors moved to sectors expected to benefit from a full reopening of the economy, such as energy and industrials.

"The rotation could be different this time because ... it is predicated on the fact that we have evidence to say things will get better," said Art Hogan, chief market strategist at National Securities in New York.

Value-linked stocks, which tend to outperform coming out of a recession, added 4%, while growth stocks fell 0.6%.

Graphic: 5-yr performance gap between growth and value stocks https://fingfx.thomsonreuters.com/gfx/mkt/rlgvdawmkpo/Pasted%20image%201605016115229.png

The main U.S. indexes hit new peaks on Monday as data from Pfizer Inc's late-stage COVID-19 vaccine trial spurred bets of a swift economic recovery next year. Democrat Joe Biden's projected victory in the U.S. presidential election also added to the market cheer.

Biden hailed the progress on the vaccine, but urged caution saying it would be "many more months" before widespread vaccination is available. Meanwhile, daily new U.S. cases topped 100,000 for the sixth straight day.

U.S. regulators on Monday also authorized emergency use of the first experimental antibody drug for COVID-19 developed by Eli Lilly & Co, pushing its shares up by 2.2%. At 9:54 a.m. ET, the Dow Jones Industrial Average was up 76.21 points, or 0.26%, at 29,234.18, the S&P 500 was down 14.28 points, or 0.40%, at 3,536.22. The Nasdaq Composite was down 141.57 points, or 1.21%, at 11,572.21.

Amgen Inc gained 2.7% after its asthma drug, being developed in collaboration with AstraZeneca, met the main goal of a late-stage study.

Ulta Beauty Inc topped gainers on the S&P 500 with its 9.0% jump after the cosmetics store chain signed a long-term deal with Target Corp to open its own stores at the big box retailer's locations. Target gained 1.6%.

Apple Inc rose about 0.2% ahead of an event later in the day where it is expected to unveil new Mac computers using its own in-house processor chips.

Advancing issues outnumbered decliners for a 1.57-to-1 ratio on the NYSE and a 1.12-to-1 ratio on the Nasdaq.

The S&P index recorded two new 52-week highs and no new low, while the Nasdaq recorded 24 new highs and 12 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty, Patrick Graham and Shounak Dasgupta)

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

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

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

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

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.