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* FLIR jumps to near 1-year high on $8 bln takeover deal
* Tesla shares hit record high on strong 2020 deliveries
* CBOE volatility index hits two-week high
* Dow down 1.54%, S&P 500 down 1.55%, Nasdaq down 1.53%
(Updates to mid-afternoon trade, adds new comment, details;
changes byline)
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 4 (Reuters) - Shares on Wall Street fell
sharply from all-time peaks on the first trading day of the year
on Monday, as risk appetite ebbed amid upcoming runoff elections
in Georgia and the persistent surge in coronavirus cases.
The Dow, which touched a record high earlier in the session
along with the S&P 500, was also dragged down by a more than 4%
fall in Boeing Co's BA.N shares after Bernstein cut its rating
to "underperform," saying issues with MAX 787 could
significantly hurt the U.S. planemaker's free cash flow.
All three main indexes dropped to two-week lows from record
highs, fueled by monetary stimulus and the start of vaccine
rollouts.
The fate of U.S. President-elect Joe Biden's agenda,
meanwhile, including rewriting the tax code, boosting stimulus
and infrastructure spending hinges firmly on Tuesday's twin
Senate races in the battleground state of Georgia that will
determine control of the chamber. Wall Street's fear gauge .VIX touched a two-week high on
Monday.
"Investors are feeling a bit nervous on the first trading
day of the New Year and I think this is a confluence of
factors," said Lindsey Bell, chief investment strategist at Ally
Invest, in Charlotte, North Carolina.
She cited the rise in COVID-19 cases, the new virus variant
that has spread around the world, and the Georgia Senate race.
Total U.S. deaths from COVID-19 have reached more than
350,000. "Investors are at a point where they want to take breather
while they assess all the different things coming in the new
year," Bell said.
Almost all S&P sectors dropped with real estate .SPLRCR ,
utilities .SPLRCU and industrials .SPLRCI posting the
sharpest percentage declines. Consumer discretionary .SPLRD
and materials .SPLRCM hit all-time highs in early trading.
At 2:00 p.m. ET (1900 GMT), the Dow Jones Industrial Average
.DJI fell 456.14 points, or 1.49%, to 30,150.34, the S&P 500
.SPX lost 56.55 points, or 1.51%, to 3,699.52 and the Nasdaq
Composite .IXIC dropped 194.50 points, or 1.51%, to 12,693.78.
On the data front, U.S. manufacturing activity picked up at
its briskest pace in more than six years in December, a survey
showed on Monday. It comes on the heels of upbeat factory
activity surveys across Europe and Asia earlier in the day.
Some investors are cautious about the pace of economic
growth as U.S. jobless claims remain stubbornly high, while a
new round of pandemic-related restrictions last month and a new
variant of the coronavirus have cast a shadow on the outlook.
Tesla Inc's TSLA.O shares extended a meteoric rally to
scale a record high after the electric-car maker reported
better-than-expected vehicle deliveries in 2020. Shares of FLIR Systems Inc FLIR.O jumped about 19% after
Teledyne Technologies Inc TDY.N agreed to buy the thermal
imaging camera supplier for $8 billion in cash and stock.
Teledyne's shares dropped about 9%. Declining issues outnumbered advancing ones on the NYSE by a
2.06-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favored decliners.
The S&P 500 posted 54 new 52-week highs and no new lows; the
Nasdaq Composite recorded 148 new highs and 16 new lows.