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* Democrats move closer to Senate control
* Tech behemoths slide on fears of tighter regulation
* Industrials, banks climb on stimulus hopes
* Small-cap Russell 2000 futures jump to record high
* Futures: Dow up 0.2%, S&P off 0.3%, Nasdaq down 1.4%
(Adds comment, details; updates prices)
By Medha Singh and Devik Jain
Jan 6 (Reuters) - Futures tied to the tech-heavy Nasdaq 100
index tumbled nearly 1.5% on Wednesday as the likelihood of
Democrats gaining control of the Senate sparked fears of
increased regulatory scrutiny of technology mega-caps.
Democratic challenger Raphael Warnock won a hotly contested
Senate race in Georgia over Republican incumbent Kelly Loeffler,
while Democrat Jon Ossoff held a narrow lead over incumbent
Republican David Perdue in the other race. A final outcome is not expected until later on Wednesday at
the earliest.
A "blue wave" would give more scope for President-elect Joe
Biden to act on his agenda including new stimulus, but it could
also mean higher corporate taxes and more regulations for
technology behemoths, which led Wall Street's recovery from a
coronavirus-driven crash last year. "If the Democrats take control of the Senate, corporate
taxes are going to go up and that's a negative for Corporate
America and for equities," said Peter Cardillo, chief market
economist at Spartan Capital Securities in New York.
"In the short term, it is likely to cap stocks and could be
the catalyst for a pullback."
Apple Inc AAPL.O , Microsoft Corp MSFT.O , Amazon.com Inc
AMZN.O , Google-parent Alphabet Inc GOOGL.O and Facebook Inc
FB.O dropped between 1.6% and 2.4% in early premarket trading.
Tesla Inc TSLA.O was the only major technology stock
trading higher.
At 08:35 a.m. ET, Nasdaq 100 E-minis NQcv1 were down
177.75 points, or 1.39%, and S&P 500 E-minis EScv1 were down
9.75 points, or 0.26%.
However, Dow e-minis 1YMcv1 climbed 0.14% as bets on
another round of stimulus and infrastructure spending propped up
shares of industrial bellwethers Caterpillar Inc CAT.N and 3M
Co MMM.N . Futures tracking the small-cap Russell 2000 index
RTYcv1 jumped to a record high.
Shares of JPMorgan Chase & Co JPM.N , Citigroup Inc C.N
and Bank of America Corp BAC.N rose between 2.5% and 3%,
tracking a sharp rise in the benchmark 10-year U.S. Treasury
yield. US/
Hopes of a vaccine-powered economic recovery in 2021 pushed
Wall Street's main indexes to record highs in late-December,
with sectors that had previously lagged, including banks,
industrials and energy, fuelling the rally.
"You are seeing more evidence of a rebound in value over
growth, and it feeds into the debate as to whether investors
should pile into more cyclicals which are co-related with value
or stick to bigger players within the growth space given that
valuations in some cases are quite extreme," said Sebastien
Galy, macro strategist at Nordea Asset Management.
"Market is quite nervous about its position in large tech."
Invesco Solar ETF TAN.P gained about 5.6% on expectations
that clean energy companies will benefit under a
Democrat-controlled Congress, while bets on decriminalizing
marijuana at the federal level lifted ETFMG Alternative Harvest
ETF MJ.P up 8%.
AmerisourceBergen Corp ABC.N gained 4.6% after the U.S.
drug wholesaler said it would buy Walgreens Boots Alliance's
WBA.O drug distribution business for $6.5 billion to expand in
Europe. Dow component Walgreens rose 2.2%.