Nasdaq loses ground as tech weighs; banks lift S&P, Dow

By Yashaswini Swamynathan

REUTERS - The Nasdaq lost ground sharply on Thursday, dragged down by a slide in technology stocks, as investors poured money into sectors that may benefit from Donald Trump's victory in the U.S. election.

The S&P 500 extended its loses to trade lower, while the Dow hit a record intraday high earlier in the session.

Trump's proposed policies such as tax cuts, higher fiscal spending and simplifying regulation are likely to benefit sectors such as banks and industrials.

But the possibility of Trump slapping punitive tariffs on exports from some countries such as China has unnerved some investors.

"Tech stocks aren't really in the handbook," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

"They aren't really going to benefit from Trump's stimulus spending on infrastructure and are sort of sitting in the middle. They aren't part of the oversold sectors such as banks and health nor are they high dividend paying stocks that getting sold off."

Nasdaq components Apple was down 2.7 percent at $107.90, while Amazon was off nearly 5 percent.

The S&P 500 technology index plunged 2.02 percent and was on track for its worst day in two months.

"Tech has the most important export exposure of any sector, so there are some fears of rising trade barriers that would hit tech pretty meaningfully," said Mike Bailey, director of research at FBB Capital Partners.

At 12:26 p.m. ET (1626 GMT), the Dow Jones industrial average was up 155.01 points, or 0.83 percent, at 18,744.7.

The S&P 500 was up 0.15 points, or 0.01 percent, at 2,163.41 and the Nasdaq Composite was down 64.73 points, or 1.23 percent, at 5,186.34.

High-dividend sectors utilities, telecom services and consumer staples sold off as bond yields rose due to expectations of higher interest rates.

The financial sector rose 2.85 percent, trading at its highest level since 2008.

The index got a lift after St. Louis Federal Reserve President James Bullard said the Republican sweep of the White House and Congress could break the current gridlock over national policy.

Industrials trailed the financials with a 1.9 percent advance.

Goldman Sachs' 3.5 percent gain and IBM's 2.8 percent advance were chiefly responsible for the Dow regaining some of the momentum it lost earlier in the day.

Macy's rose 7.9 percent to $41.38 after the department store operator raised its full-year sales forecast and announced a partnership to monetize some of its real-estate assets.

Walt Disney and Nordstrom are expected to report earnings after market closes.

Declining issues outnumbered advancing ones on the NYSE by 1,526 to 1,473. On the Nasdaq, 1,706 issues rose and 1,067 fell.

The S&P 500 index showed 80 new 52-week highs and six new lows, while the Nasdaq recorded 294 new highs and 35 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)