Nasdaq hits record high as big tech leads; energy stocks battered

(Reuters) – The Nasdaq index extended a rally to hit a record high on Monday as investors piled into big technology stocks on worries over the short-term hit to the economy from COVID-19 restrictions, while energy shares tumbled on lower oil prices.

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Shares in companies including Apple Inc, Tesla Inc, Facebook Inc and Microsoft Corp boosted the Nasdaq with gains of nearly 2% each.

Authorities in California, the most populous state in the country, on Monday compelled much of the state to close shop and stay at home the day after it reported a record 30,000-plus new coronavirus cases.

“I think what you are seeing today is a focus on the short term with the shutdown, which is why technology is leading the way,” said Christopher Grisanti, chief equity strategist at MAI Capital Management in Ohio.

“These are companies that can do well even if the economy again goes into a shutdown. This is more reminiscent of early 2020, and I think it gives investors a chance to look ahead and try to find investments that will work in 2021.”

The S&P 500 energy index fell over 2%, the most among the 11 major sectors as oil prices slipped. Oil companies Chevron Corp, Exxon Mobil Corp and Occidental Petroleum Corp fell between 2% and 3% in early trading.

Wall Street tracked a more cautious move in global stocks earlier in the day after Reuters reported Washington was preparing to impose sanctions on some Chinese officials over their alleged role in Beijing’s disqualification of elected opposition legislators in Hong Kong.

Meanwhile, talks aimed at delivering fresh coronavirus aid gathered momentum in the U.S. Congress on Friday, as a bipartisan group of lawmakers worked to put the finishing touches on a new $908 billion bill.

Analysts remain confident of the passage of the bill by a Dec. 11 deadline, with Thomas Hayes, managing member at Great Hill Capital in New York saying, “I think the bill is going to pass, but it will be smaller than $908 billion.”

Promising vaccine updates from major drugmakers have raised investor hopes for an economic recovery next year and eased worries over a surge in U.S. infections, powering Wall Street’s main indexes to record highs recently.

The Dow Jones Industrial Average opened at an all-time high on Monday, before turning negative moments later.

At 10:33 a.m. ET, the Dow Jones Industrial Average was down 145.34 points, or 0.48%, at 30,072.92, the S&P 500 was down 2.86 points, or 0.08%, at 3,696.26, and the Nasdaq Composite was up 57.98 points, or 0.47%, at 12,522.22.

Intel Corp fell 3.7% after Bloomberg News reported Apple Inc was planning a series of new Mac processors for introduction as early as 2021 that are aimed at outperforming Intel’s fastest processors.

Declining issues outnumbered advancers for a 1.35-to-1 ratio on the NYSE and a 1.16-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and no new low, while the Nasdaq recorded 174 new highs and six new lows.

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