The S&P 500 retreats, crude gains as vaccine hopes boost recovery bets
By Stephen Culp NEW YORK (Reuters) - The S&P 500 and the Nasdaq retreated on Tuesday and oil prices extended the previous session's surge as promising developments toward 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 advanced as investors bet on a demand rebound
By Stephen Culp
NEW YORK (Reuters) - The S&P 500 and the Nasdaq retreated on Tuesday and oil prices extended the previous session's surge as promising developments toward 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 advanced 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.
"The rotation away from COVID beneficiaries to beneficiaries of a more open economy continues today," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "Some of the things that were expensive and tied to the work-from-home economy seem to be suffering a bit.
"The Pfizer news really surprised everyone yesterday and put a light at the end of the tunnel," Tuz added. "That tunnel may be 12 months long or 6 months long, but it suggests that life is going to get back to what it was before COVID started."
The Dow Jones Industrial Average <.DJI> rose 230.92 points, or 0.79%, to 29,388.89, the S&P 500 <.SPX> lost 6.6 points, or 0.19%, to 3,543.9 and the Nasdaq Composite <.IXIC> dropped 157.55 points, or 1.35%, to 11,556.23.
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> shed 0.02%.
Emerging market stocks lost 1.11%. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 0.68% lower, while Japan's Nikkei <.N225> rose 0.26%.
U.S. Treasury yields inched higher 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 as the forex markets absorbed Monday's big moves due to vaccine developments.
The dollar index <.DXY> fell 0.02%, 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 Dan Grebler and Nick Zieminski)
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