(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 –
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.
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