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GLOBAL MARKETS-Nasdaq surges as investors return to tech, crude ends off highs

Stephen Culp
·3 min read

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh (Updates to market close)

By Stephen Culp

NEW YORK, Nov 11 (Reuters) - Tech pushed the Nasdaq to close sharply higher and oil prices extended their rally on Wednesday, as hopes of potential COVID-19 were tempered by spiking coronavirus infections and the looming threat of a new round of lockdowns.

While the S&P 500 also advanced, the blue-chip Dow ended the session slightly in the red.

A return to technology-focused market leaders, which thrived during COVID shutdowns but sold off earlier in the week as investors pivoted to economically-sensitive cyclical stocks, put the Nasdaq out front.

"This week we saw a bit of rotation from growth back to value," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. "That we're back to tech has to do with its oversold nature and there's a sense of safety in heavily capitalized technology companies."

Hopes for an end to the global health crisis gained strength after Pfizer Inc's announcement on Monday that its COVID-19 vaccine candidate, developed with BioNTech, showed a 90% success rate in preventing infection during trials.

The news stoked investors' risk appetite across the board, and sent oil prices higher, building on two straight sessions of sharp gains.

But that optimism could be waning. The Dow Jones Transportation index, seen by many as a barometer of broader economic health, ended the session sharply lower.

"The news about the success of the vaccine trial is incredibly important," Keator added. "But investors should be mindful that while there is light at the end of the tunnel we still have a ways to go."

While on Tuesday the yield of benchmark U.S. 10-year Treasuries reached the highest level since March, on Wednesday the U.S. bond market was closed in observance of Veterans Day.

The Dow Jones Industrial Average fell 23.29 points, or 0.08%, to 29,397.63, the S&P 500 gained 27.13 points, or 0.77%, to 3,572.66 and the Nasdaq Composite added 232.58 points, or 2.01%, to 11,786.43.

The momentum of vaccine hopes and encouraging comments from European Central Bank chief Christine Lagarde boosted European shares higher for the third straight session, offsetting worries over spiking coronavirus infections.

The pan-European STOXX 600 index rose 1.08% and MSCI's gauge of stocks across the globe gained 0.77%.

Emerging market stocks lost 0.13%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.2% higher, while Japan's Nikkei rose 1.78%.

Crude oil prices edged higher, extending their rally and building on gains sparked by the notion of reviving demand and a steeper-than-expected decline in U.S. inventories.

U.S. crude rose 0.22% to settle at $41.45 per barrel and Brent settled at $43.80 per barrel, up 0.44% on the day.

The dollar gained ground against a basket of currencies and the safe-haven yen weakened on hopes that a medical solution to the pandemic could jump start economic growth.

The dollar index rose 0.28%, with the euro down 0.3% to $1.1779.

The Japanese yen weakened 0.08% versus the greenback at 105.42 per dollar, while sterling was last trading at $1.3216, down 0.41% on the day.

Gold prices slid, hurt by a stronger dollar and increased risk appetite which drew investors away from the safe-haven metal.

Spot gold dropped 0.7% to $1,864.02 an ounce.

(Reporting by Stephen Culp; additional reporting by Tom Wilson; Editing by Sonya Hepinstall)