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* Banks extend gains as yields rise
* Factory activity expands in November
* Tesla, Microsoft lead losses among trillion-dollar tech
* Indexes: Dow +0.29%, S&P 500 -0.27%, Nasdaq -1.26%
Nov 23 (Reuters) - The Nasdaq tumbled for a second straight
session on Tuesday, and the S&P 500 also fell, as rising
Treasury yields prompted investors to sell Tesla, Microsoft and
other Big Tech names.
The S&P 500 growth index dropped about 1% and the
value index added 0.6% as investors sold stocks that are
sensitive to higher interest rates and bought stocks in sectors
such as energy and financials.
Treasury yields extended gains as investors ramped up
expectations of interest rate hikes next year after Jerome
Powell was nominated by President Joe Biden as fed chair for a
Tesla slid 6.3%, while Microsoft and Apple
dropped about 1% each. The three companies were the
biggest drags on the S&P 500 and the Nasdaq.
The market is being whipsawed by a holiday shortened week,
and its taking its cue from the recent uptick in interest
rates, giving investors additional reasons to take profits in an
overvalued market, said Sam Stovall, chief investment
strategist of CFRA Research in New York.
With banks benefiting from higher interest rates, the S&P
500 banks index jumped 2%, with Goldman Sachs,
JPMorgan and Bank of America all rallying.
The S&P 500 energy index jumped over 3% and was the
best-performing sector. Oil prices rose to a one-week high after
a move by the United States and other consumer nations to
release tens of millions of barrels of oil from reserves to try
to cool the market fell short of some expectations.
An IHS Markit survey showed U.S. business activity slowed
moderately in November amid labor shortages and raw material
delays, but remained comfortably in expansion territory on
strength in the manufacturing sector.
In afternoon trading, the Dow Jones Industrial Average
was up 0.29% at 35,721.95 points, while the S&P 500
lost 0.27% to 4,670.22.
The Nasdaq Composite dropped 1.26% to 15,654.67.
After closing its highest level ever last Friday, the Nasdaq
has now lost about 2.5%. It remains up about 21% so far in 2021.
The CBOE volatility index briefly rose to a more than
one-month high earlier on Tuesday.
The U.S. stock market will be closed on Thursday for the
Thanksgiving holiday, and it finishes early on Friday.
Zoom Video Communications Inc slumped 17% after its
third-quarter revenue growth rate slowed as demand for its
video-conferencing tools eased from pandemic-fueled heights last
Best Buy Co Inc slid 13% after the electronics
retailer forecast fourth-quarter comparable sales below
expectations due to supply chain issues.
Chipmakers Micron Technology and Western Digital Corp
rose 1.3% and 6.2%, respectively, after Mizuho Bank
upgraded the stocks to "buy" from "neutral".
Declining issues outnumbered advancing ones on the NYSE by a
1.46-to-1 ratio; on Nasdaq, a 2.02-to-1 ratio favored decliners.
The S&P 500 posted 12 new 52-week highs and 6 new lows; the
Nasdaq Composite recorded 47 new highs and 459 new lows.
(Additional reporting by Ambar Warrick and Devik Jain in
Bengaluru; Editing by Maju Samuel and Aurora Ellis)