S&P 500, Nasdaq retreat as tech stocks lose favor

By Medha Singh and Shivani Kumaresan (Reuters) - The S&P 500 and the Nasdaq fell 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 some Big Tech companies that have benefited most from the pandemic. Amazon.com Inc , Facebook Inc and Microsoft Corp , which have boomed during this year's work-from-home shift and powered Wall Street to new highs, extended Monday's losses and pulled the tech-heavy Nasdaq down about 1.3%.

Reuters November 11, 2020 00:07:04 IST
S&P 500, Nasdaq retreat as tech stocks lose favor

SP 500 Nasdaq retreat as tech stocks lose favor

By Medha Singh and Shivani Kumaresan

(Reuters) - The S&P 500 and the Nasdaq fell 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 some Big Tech companies that have benefited most from the pandemic.

Amazon.com Inc , Facebook Inc and Microsoft Corp , which have boomed during this year's work-from-home shift and powered Wall Street to new highs, extended Monday's losses and pulled the tech-heavy Nasdaq down about 1.3%.

The tech <.SPLRCT>, communication services <.SPLRCL> and consumer discretionary indexes <.SPLRCD> dropped sharply as investors moved to sectors expected to benefit from a full reopening of the economy, such as energy <.SPNY>, industrials <.SPLRCI> and materials <.SPLRCM>.

"We are seeing a rotation away from growth areas, in particular tech and communication services, mainly because investors want to gravitate more toward the groups that have been underperformers until now," said Sam Stovall, chief investment strategist at CFRA Research.

Value-linked stocks <.IVX>, which tend to outperform coming out of a recession, added 1%, while growth stocks <.IGX> fell 0.8%.

(GRAPHIC: five-year 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 encouraging data from a 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.

"Although great news, it's just a plan and we need to see some practical things around it like how (the vaccine) is going to roll out, who's going to get it," said JJ Kinahan, chief market strategist, TD Ameritrade in Chicago.

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.

The apparent breakthrough in a coronavirus vaccine weakens the case for another large U.S. fiscal stimulus bill, but relief is still needed for struggling businesses, investors said.

Senate Majority Leader Mitch McConnell last week argued for a smaller coronavirus stimulus package after data pointed to a drop in U.S. unemployment rate in October. At 12:40 p.m. ET the S&P 500 <.SPX> lost 6.89 points or 0.19% to 3,543.61 and the Nasdaq Composite <.IXIC> lost 121.85 points or 1.04% to 11,591.93. The Dow Jones Industrial Average <.DJI> rose 158.46 points or 0.55% to 29,316.43.

Amgen Inc gained 3.6% 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, climbing 7.7% 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 about 2%.

Apple Inc edged higher ahead of an event where it is expected to unveil new Mac computers using its own in-house processor chips.

Advancing issues outnumbered decliners for a 1.8-to-1 ratio on the NYSE and a 1.5-to-1 ratio on the Nasdaq.

The S&P index recorded 10 new 52-week highs and no new low, while the Nasdaq recorded 65 new highs and 20 new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)

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

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

The forces fighting in Ethiopia's Tigray conflict
World

The forces fighting in Ethiopia's Tigray conflict

ADDIS ABABA/NAIROBI (Reuters) - Ethiopia's military is fighting battle-hardened troops in the northern Tigray region, threatening stability around the Horn of Africa. Here are some facts on the forces: THE NATIONAL MILITARY: THE ENDF The Ethiopian National Defence Force (ENDF) has around 140,000 active personnel, the vast majority of them in the army, according to the Janes security data group. Its troops have been tested by Islamist militants in Somalia and rebel groups in Ethiopia's border regions, as well as a two-year border war with Eritrea followed by an 18-year standoff that only ended in 2018.

Turkey to impose measures to combat coronavirus, Erdogan says
World

Turkey to impose measures to combat coronavirus, Erdogan says

ISTANBUL (Reuters) - Turkey's President Tayyip Erdogan said on Tuesday that the government will impose tighter measures to fight with the coronavirus and impose partial lockdowns on weekends across the country. Speaking after the cabinet meeting, Erdogan also said all schools will remain closed until the year-end and all restaurants will only work by delivery

Brazil to track illegal Amazon wood exports using isotopes, president says
World

Brazil to track illegal Amazon wood exports using isotopes, president says

BRASILIA (Reuters) - Brazilian President Jair Bolsonaro said on Tuesday his government in coming days will name countries that are importing wood illegally extracted from the Amazon. Addressing a BRICS summit of big developing economies, Bolsonaro said Brazilian police had developed a way of tracking wood exported from the Amazon using isotopes.