By Ambar Warrick and David French
(Reuters) – The Nasdaq Composite Index hit a record high on Friday as the U.S. benchmark drew strength from technology stocks, but the Dow headed for its fourth losing session of the week.
The Dow Jones Industrial Average’s decline wiped out the last of its November gains and extended its drop to more than 2% from a Nov. 8 record high.
Friday’s fall was caused by banking, energy and airline stocks slumping on fears of new lockdowns in Europe to curb a resurgence of COVID-19 cases.
Austria outlined plans for a full lockdown, and fears that Germany could follow suit rattled stock markets globally.
Banking stocks fell about 1.7%, tracking a drop in Treasury yields as investors snapped up safe-haven bonds. [US/]Financials was among the worst-performing S&P sectors, down 1.1%.
Carriers including Delta Air Lines, United Airlines and American Airlines, and cruiseliners Norwegian Cruise Line and Carnival Corp fell between 1.4% and 3.9%.
Major oil firms dropped as crude prices fell on renewed concerns over European demand, making the S&P energy sector the worst performer among its peers with a 4% loss. [O/R]
“It’s a normal time to take risk off. And in this case, there’s just so much liquidity that the market doesn’t go down – just people take risk off by going into safe havens,” said Jay Hatfield, chief executive of Infrastructure Capital Management in New York.
“Right now, COVID-19 is kind of a headline of the day. Every trade in the market right now is being driven by COVID.”
Falling yields and safe-haven demand supported major technology stocks, which in turn lifted the Nasdaq.
Tech stocks are sensitive to yields, as investors weigh future earnings in the sector against returns on debt.
FAANG stocks, which have largely persevered through economic shocks since 2020, traded broadly higher. Netflix Inc gained along with other stay-at-home stocks.
IPhone maker Apple Inc hit a record high as investors priced in strong Black Friday sales next week.
Chipmaker Nvidia Corp rose 3.3% in heavy trade after posting strong quarterly results late Wednesday. The Philadelphia semiconductor index also hit a fresh record high.
By 2:17 p.m. ET, the Dow Jones Industrial Average fell 225.98 points, or 0.63%, to 35,644.97; the S&P 500 gained 0.95 points, or 0.02%, at 4,705.49; and the Nasdaq Composite added 80.84 points, or 0.51%, at 16,074.55.
While flat on Friday, the S&P was on course to finish the week in positive territory, fueled in recent days by retailers.
The S&P consumer discretionary sector traded at a new peak on Friday, following strong retail earnings this week and positive signs for holiday shopping.
Lowe’s Companies was up 0.7%, just below the record intraday mark it achieved after reporting third-quarter earnings on Wednesday. ETSY Inc rose 1.6% after posting its third lifetime intraday high this week.
The information technology segment was the best performer on the S&P 500, up 0.6%.
It was led by Intuit Inc, which jumped 9.4% as brokerages lifted their price targets on the income tax software company after it beat quarterly estimates and raised forecasts.
(Reporting by Ambar Warrick and Devik Jain in Bengaluru and David French in New York; Editing by Maju Samuel and Richard Chang)