US STOCKS-S&P 500, Dow tumble from record highs on nerves over Georgia runoff elections

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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
* Indexes down: Dow 1.8%, S&P 1.7%, Nasdaq 1.4%

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By Medha Singh and Shivani Kumaresan
Jan 4 (Reuters) - Wall Street's main indexes fell nearly 2%
on the first trading day of the year on Monday as nerves over
the outcome of runoff elections in Georgia this week countered
optimism over a vaccine-driven recovery in the global economy.
The Dow was also dragged down by a near 4.3% 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.
The fate of President-elect Joe Biden's agenda including
rewriting the tax code, boosting stimulus and infrastructure
spending hinges firmly on Tuesday's twin Senate races in the
battleground state that will determine control of the chamber.
"The market is going to be hard pressed to go up much until
the Georgia election is decided," said Rick Meckler, partner at
Cherry Lane Investments in New Vernon, New Jersey.
"Senate race in Georgia is now a toss up," Meckler said,
adding that it "is the much bigger risk as investors have
already decided that COVID will be mostly behind us later in the
year."
Before dipping in the red, the S&P 500 and the Dow notched
record levels within the first few minutes of trading,
attempting to extend a rally from 2020 fueled by monetary
stimulus and the start of vaccine rollouts.
Wall Street's fear gauge .VIX touched a two-week high on
Monday.
All major 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 11:54 a.m. ET the Dow Jones Industrial Average .DJI
fell 562.60 points, or 1.84%, to 30,043.88, the S&P 500 .SPX
lost 62.89 points, or 1.67%, to 3,693.18, and the Nasdaq
Composite .IXIC lost 187.31 points, or 1.45%, to 12,700.71.
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 the
discovery of 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 advancers for a 2.2-to-1 ratio
on the NYSE and a 1.6-to-1 ratio on the Nasdaq.
The S&P 500 posted 54 new 52-week highs and no new low,
while the Nasdaq recorded 284 new highs and 14 new lows.