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(Reuters) – The S&P 500 and the Dow eased from record levels on the first trading day of the year on Monday as nerves over the outcome of runoff elections in Georgia this week countered optimism over a vaccine-driven recovery in the global economy.

A Christmas tree is pictured outside the New York Stock Exchange during the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., December 16, 2020. REUTERS/Carlo Allegri

The Dow was also dragged down by a near 3% fall in Boeing Co shares after Bernstein cut its rating to “underperform”, saying issues with MAX 787 could significantly hurt the U.S. planemaker’s free cash flow.

The fate of President-elect Joe Biden’s agenda including rewriting the tax code, boosting stimulus and infrastructure spending hinges firmly on Tuesday’s twin Senate races in the battleground state of Georgia that will determine control of the chamber.

“Its a small reversal but I think people came in the morning to start the year with some optimism but the cloudy political picture in the U.S. is weighing down the markets a little bit,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“Senate race in Georgia is now a toss up. The Georgia run off is the much bigger risk as investors have already decided that COVID will be mostly behind us later in the year.”

Wall Street’s major averages rounded off 2020 with strong gains as a wave of monetary stimulus and promising developments on the vaccine front helped the indexes recover from their sharpest contraction in decades.

U.S. manufacturing activity picked up at its briskest pace in more than six years in December, a survey showed on Monday. It comes on the heels of upbeat factory activity surveys across Europe and Asian earlier in the day.

On the vaccine front, Britain on Monday became the first country to roll out the COVID-19 shot developed by Oxford University and AstraZeneca.

Some investors are cautious about the pace of economic growth as U.S. jobless claims remain stubbornly high, while a new round of business closures last month and the discovery of a new variant of the coronavirus have cast a shadow on the outlook. At 10:13 a.m. ET the Dow Jones Industrial Average fell 182.45 points or 0.60% to 30,424.03, the S&P 500 lost 15.82 points or 0.42% to 3,740.25 and the Nasdaq Composite lost 34.18 points or 0.27% to 12,854.10.

Energy and materials were the only two sectors trading higher. Real estate, utilities and industrials posted the sharpest percentage declines.

Tesla Inc shares extended a meteoric rally to scale a record high after the electric-car maker reported better-than-expected vehicle deliveries in 2020.

Shares of FLIR Systems jumped about 20% after Teledyne Technologies Inc agreed to buy the thermal imaging camera supplier for $8 billion in cash and stock. Teledyne shares dropped about 8%.

Advancing issues matched decliners on the NYSE and outnumbered decliners by a 1.3-to-1 ratio on the Nasdaq.

The S&P 500 posted 52 new 52-week highs and no new low while the Nasdaq recorded 255 new highs and 11 new lows.

Reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Editing by Anil D’Silva