US STOCKS-S&P 500, Nasdaq retreat as investors sell tech stocks

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* Market cools after huge Monday rally

* Pandemic tech winners retreat

* Investors ditch growth stocks in favor of value

* Dow up 0.62%, S&P down 0.27%, Nasdaq falls 1.26% (Adds comment, details; Updates prices)

Nov 10 (Reuters) - The S&P 500 and the Nasdaq dropped on Tuesday as excitement over signs of a first successful late-stage COVID-19 vaccine trial faded, while investors continued to pull money out of some Big Tech companies that have benefited most from the pandemic. Inc, Facebook Inc and Microsoft Corp, which have flourished from this year’s work-from-home shift and powered Wall Street to new heights, extended Monday’s losses and pulled the tech-heavy Nasdaq down about 1.3%.

The tech, communication services and consumer discretionary indexes dropped sharply as investors moved to sectors expected to benefit from a full reopening of the economy, such as energy, industrials and materials.

“We are seeing a rotation away from growth areas, in particular tech and communication services, mainly because investors want to gravitate more toward the groups that have been under performers until now,” said Sam Stovall, chief investment strategist at CFRA Research.

Value-linked stocks, which tend to outperform coming out of a recession, added 0.8%, while growth stocks fell 1%.

The main U.S. indexes hit new peaks on Monday as encouraging data from a late-stage COVID-19 vaccine trial spurred bets of a swift economic recovery next year. Democrat Joe Biden’s projected victory in the U.S. presidential election also added to the market cheer.

“Although great news, it’s just a plan and we need to see some practical things around it like how (the vaccine) is going to roll out, who’s going to get it,” said JJ Kinahan, chief market strategist, TD Ameritrade in Chicago.

Biden hailed the progress on the vaccine, but urged caution saying it would be “many more months” before widespread vaccination is available. Meanwhile, daily new U.S. cases topped 100,000 for the sixth straight day.

The apparent breakthrough in a coronavirus vaccine weakens the case for another large U.S. fiscal stimulus bill, but relief is still needed for struggling businesses, investors said.

Senate Majority Leader Mitch McConnell last week argued for a smaller coronavirus stimulus package following data showing a drop in unemployment rate in October.

At 11:31 a.m. ET, the Dow Jones Industrial Average was up 180.15 points, or 0.62%, at 29,338.12, the S&P 500 was down 9.76 points, or 0.27%, at 3,540.74. The Nasdaq Composite was down 148.07 points, or 1.26%, at 11,565.71.

Amgen Inc gained 3.8% after its asthma drug, being developed in collaboration with AstraZeneca, met the main goal of a late-stage study.

Ulta Beauty Inc topped gainers on the S&P 500 with a 7.3% jump after the cosmetics store chain signed a long-term deal with Target Corp to open its own stores at the big box retailer’s locations. Target gained 2.0%.

Apple Inc edged higher ahead of an event later in the day where it is expected to unveil new Mac computers using its own in-house processor chips.

Advancing issues outnumbered decliners for a 1.58-to-1 ratio on the NYSE and a 1.28-to-1 ratio on the Nasdaq.

The S&P index recorded six new 52-week highs and no new low, while the Nasdaq recorded 51 new highs and 18 new lows.

Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty, Patrick Graham and Shounak Dasgupta