(Reuters) -The Dow Jones fell and the S&P 500 was flat on Friday as fears of new lockdowns to curb the spread of COVID-19 in Europe hammered banking, energy and airline stocks, while strength in technology stocks pushed the Nasdaq to a record high.
A resurgence in COVID-19 cases saw Austria outline 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 0.9% and 1.8%.
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 3.7% 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 usually sensitive to yields, given that investors weigh future earnings in the sector against returns on debt.
FAANG stocks, which have largely persevered through economic shocks since 2020, rose between 0.3% and 3.9%. Netflix 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 rose 3.1% in heavy trade after posting strong quarterly results late Wednesday. The Philadelphia semiconductor index also hit a record high.
At 11:45 a.m. ET, the Dow Jones Industrial Average was down 167.60 points, or 0.47%, at 35,703.35 and the S&P 500 was up 5.66 points, or 0.12%, at 4,710.20. The Nasdaq Composite was up 115.89 points, or 0.72%, at 16,109.60.
The S&P consumer discretionary sector hit a record high, following strong retail earnings this week and positive indicators for holiday shopping.
But inflation fears also persisted in markets after recent comments from Federal Reserve officials suggested that price pressures were becoming more broad-based.
President Joe Biden’s $1.75 trillion bill to bolster the social safety net and fight climate change passed the U.S. House of Representatives on Friday, sending it to the Senate where negotiations will continue.
Among other stocks, Intuit Inc jumped 10.1% as brokerages lifted their price targets on the income tax software company after it beat quarterly estimates and raised forecast.
Applied Materials Inc dropped 2.9% after the chipmaker forecast first-quarter sales and profit below market estimates on supply chain woes.
Declining issues outnumbered advancers for a 1.55-to-1 ratio on the NYSE and for a 1.22-to-1 ratio on the Nasdaq.
The S&P index recorded 39 new 52-week highs and six new lows, while the Nasdaq recorded 74 new highs and 227 new lows.
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