GLOBAL MARKETS-S&P 500 dips, Nasdaq sinks as investors adjust bets on recovery hopes

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

(Updates to U.S. market close)
By Stephen Culp
NEW YORK, Nov 10 (Reuters) - The S&P 500 posted a modest
loss and the Nasdaq closed sharply lower on Tuesday as promising
news regarding an effective COVID-19 vaccine led investors away
from market leaders and toward cyclical stocks associated with
economic recovery.
The blue-chip Dow, buoyed by industrial shares, gained
ground and crude oil prices extended the previous session's
surge as investors bet on a demand rebound.
Pfizer Inc PFE.N announced on Monday that its COVID-19
vaccine candidate, developed with German partner BioNTech
22UAy.DE , showed in trials it had a 90% success rate in
preventing infection.
The development led to investors taking profits from
market-leading tech stocks that have thrived amid the pandemic
recession, a sell-off which pulled the tech-heavy Nasdaq deep
into red territory.
"Equity markets in the U.S. have experienced the start of a
significant rotation following the vaccine announcement," said
Tim Ghriskey, chief investment strategist at Inverness Counsel
in New York. "It's been a dramatic change and it's all in
anticipation of returning to some form of economic normalcy once
the vaccine has been distributed to the broad population."
"The caveat is there's a second wave to the virus that's
infecting a record number of people," Ghriskey added. "But at
least for now the markets are willing to look through that
economic pain to better days ahead once the virus has been
eradicated."
Uncertainties from Washington still simmer in the background
as President Donald Trump continued to press for investigations
of election fraud following his defeat by Democrat challenger
Joe Biden. "The circus going on in DC which is causing concern about a
smooth transition of administrations in the months ahead,"
Ghriskey said. "The flames coming out of Washington are
unrelenting and constant."
The Dow Jones Industrial Average .DJI rose 262.95 points,
or 0.9%, to 29,420.92, the S&P 500 .SPX lost 4.97 points, or
0.14%, to 3,545.53 and the Nasdaq Composite .IXIC dropped
159.93 points, or 1.37%, to 11,553.86.
European shares extended their gains on lingering vaccine
optimism and news that EU negotiators have agreed on a budget, a
crucial step toward activating the bloc's 1.8 trillion euro
recovery package. The pan-European STOXX 600 index .STOXX rose 0.90% and
MSCI's gauge of stocks across the globe .MIWD00000PUS %.
Emerging market stocks lost 1.16%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.69%
lower, while Japan's Nikkei .N225 rose 0.26%.
U.S. Treasury yields inched lower on Tuesday in choppy
trading, consolidating the previous session's gains due to
economic optimism in the wake of positive news on a potential
coronavirus vaccine.
Benchmark 10-year notes US10YT=RR last rose 1/32 in price
to yield 0.9561%, from 0.958% late on Monday.
The 30-year bond US30YT=RR last rose 7/32 in price to
yield 1.7408%, from 1.751% late on Monday.
Oil prices extended Monday's surge, which gave the commodity
its biggest daily percentage gain in five months, as views of a
possible medical solution to the pandemic outweighed sagging
demand from new lockdowns to contain the virus. U.S. crude CLcv1 rose 2.66% to settle at $41.36 per
barrel, while Brent settled at $43.61 per barrel, up 2.85% on
the day.
The dollar held its ground against a basket of currencies
and the yen hovered near three-week lows as the forex markets
absorbed Monday's big moves due to vaccine developments.

The dollar index .DXY rose 0.08%, with the euro EUR=
down 0.05% to $1.1807.
The Japanese yen strengthened 0.08% versus the greenback at
105.30 per dollar, while Sterling GBP= was last trading at
$1.3249, up 0.65% on the day.
Gold regained some ground lost in Monday's plunge
expectations of fiscal and monetary stimulus offered support to
the safe-haven metal. Spot gold XAU= added 0.6% to $1,873.53 an ounce.

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MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
Stocks hit new highs https://tmsnrt.rs/38vx2mG
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