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* Banks extend gains as yields rise
* Factory activity expands in November
* Tesla, Microsoft lead losses among trillion-dollar tech
* Indexes down: Dow 0.01%, S&P 0.41%, Nasdaq 1.24%
Nov 23 (Reuters) - The Nasdaq lagged its Wall Street peers
on Tuesday as rising Treasury yields weighed on major technology
stocks, while gains in banks and energy helped limit losses in
the S&P 500 and the Dow Jones.
The S&P tech subindex sank 1.2% as rising yields
dented appeal of the high-growth sector. Tesla Inc and
Microsoft Corp were the worst performers among
trillion-dollar tech firms, falling 3.2% and 1.4%, respectively.
Treasury yields extended gains from Monday as investors
ramped up expectations for interest rate hikes next year after
Jerome Powell was nominated by President Joe Biden as Fed Chair
for a second term.
On the other hand, the S&P banks subindex rose
1.6%, with Goldman Sachs, JPMorgan and Bank of
America rising between 1% and 2.3% in tandem with higher
The S&P 500 energy index jumped 2.8% and was the
best-performing sector, tracking higher oil prices after a move
by the United States and other consumer nations to try to cool
the market fell short of some expectations.
"What you may be seeing with growth stocks is investors are
rotating into different sectors, they are not rotating out. They
are still bullish," said Eric Schiffer, chief executive of
private equity firm Patriarch Organization in Los Angeles.
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.
At 12:03 p.m. ET, the Dow Jones Industrial Average
was down 4.76 points, or 0.01%, at 35,614.49 and the S&P 500
was down 19.22 points, or 0.41%, at 4,663.72. The Nasdaq
Composite was down 196.46 points, or 1.24%, at
The Nasdaq and the S&P 500 had slipped from record highs on
Monday, as Powell's nomination prompted a volatile session.
The CBOE volatility index briefly rose to a more than
one-month high earlier on Tuesday.
With the Thanksgiving holiday expected to keep volumes low
this week, markets could see high volatility.
"Because it's illiquid you'll probably see greater
volatility in individual stock names and the potential for
greater movement in the market based on any news that hits it,"
said Rick Meckler, partner at Cherry Lane Investments In New
Vernon, New Jersey.
Among other stocks, Zoom Video Communications Inc
fell 18.6% after its third-quarter revenue growth rate slowed to
35% as demand for its video-conferencing tools eased from
pandemic-fueled heights last year.
Best Buy Co Inc slid 14.5% after the electronics
retailer forecast fourth-quarter comparable sales below
expectations due to supply chain issues.
Chipmakers Micron Technology and Western Digital Corp
rose 1.0% and 5.3%, respectively, outpacing their peers
after Mizuho upgraded the stocks to "buy" from "neutral".
Declining issues outnumbered advancers for a 1.60-to-1 ratio
on the NYSE and for a 2.02-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and six new
lows, while the Nasdaq recorded 38 new highs and 424 new lows.
(Reporting by Ambar Warrick and Devik Jain in Bengaluru;
Editing by Maju Samuel)