US STOCKS-Banks, industrials lift Dow, S&P 500 on possible Democrat sweep in Georgia

(For a Reuters live blog on U.S., UK and European stock
markets, click LIVE/ or type LIVE/ in a news window.)
* 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
* Indexes: Dow up 0.9%, S&P up 0.3%, Nasdaq down 0.7%

(Adds comment, details; updates prices)
By Medha Singh and Devik Jain
Jan 6 (Reuters) - The Dow and the S&P 500 rose on Wednesday,
with investors piling into economy-linked financial and
industrial stocks on bets that a Democrat-controlled Senate
would lead to more fiscal stimulus and infrastructure spending.
Financials .SPSY hit a 1-year high, while materials
.SPLRCM , industrial .SPLRCI and energy .SPNY sectors
climbed over 1%.
Banks shares .SPXBK jumped about 5%, tracking a sharp rise
in the benchmark 10-year U.S. Treasury yield. US/
Democrats won one U.S. Senate race in Georgia and led in
another, moving closer to a sweep in a deep South state that
would give them control of Congress and the power to advance
President-elect Joe Biden's policy goals. A final outcome is not
expected until later on Wednesday. "There will be beneficiaries of a Democratic sweep and there
are companies in the Nasdaq - technology and healthcare - that
could potentially face some short-term headwinds when it comes
to higher taxes and more regulation, impacting their bottom
lines," said Tim Chubb, chief investment officer at GIRARD in
West Chester, Pennsylvania.
The tech-heavy Nasdaq slipped 0.7% as behemoths 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%.
Tesla Inc TSLA.O was the only major technology stock
trading higher.
At 10:06 a.m. ET, the Dow Jones Industrial Average .DJI
rose 260.13 points, or 0.86%, to 30,651.73, the S&P 500 .SPX
gained 9.67 points, or 0.26%, to 3,736.53 and the Nasdaq
Composite .IXIC lost 88.86 points, or 0.69%, to 12,730.10.
The small-cap Russell 2000 index .RUT jumped 2.8%,
hovering near a record high.
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 6.7% 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 8.4%.
AmerisourceBergen Corp ABC.N gained 7.4% 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 2.6%. Advancing issues outnumbered decliners by a 1.7-to-1 ratio
on the NYSE and by a 1.8-to-1 ratio on the Nasdaq.
The S&P 500 posted 46 new 52-week highs and no new low,
while the Nasdaq recorded 197 new highs and three new lows.