S&P 500, Nasdaq hit records on vaccine optimism

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In this news, we discuss the S&P 500, Nasdaq hit records on vaccine optimism.

(Reuters) – The S&P 500 and Nasdaq Composite indexes hit record highs on Tuesday, with investors betting a COVID-19 vaccine will be available soon and more confident of a rapid economic recovery following bullish data from Chinese factories.

Investors are closely following updates on a handful of vaccine candidates as well as the start of global shipments as drugmakers submit documents for regulatory approvals.

Pfizer Inc gained around 3% after drug maker and Germany’s BioNTech SE sought emergency approval of their vaccine candidate from the European regulator.

The partners are neck and neck with rival Moderna Inc, which has also sought emergency approval from the European regulator. Its stock fell 9%, falling from a previous day’s record.

“There is this optimism about what this means as we see news about vaccines emerge,” said Bill Northey, senior director of investments at US Bank Wealth Management in Minneapolis.

“As we search for a healthcare solution, we might be sitting on a coil spring of economic activity, but it might take a while for it to kick in.

Earlier in the day, global stocks were boosted by data which showed Chinese factory activity in November rose at its fastest pace in a decade. Several other countries also reported a sharp increase in factory activity.

In the United States, the slowdown in manufacturing activity over the month did not deter investors.

All 11 sector indices of the S&P 500 rose, with communications services surging 2.4% and the largest gains.

Investors also focused on remarks by Secretary of the Treasury Steve Mnuchin and Federal Reserve Chairman Jerome Powell at the Senate Banking Committee, where they agreed on the need for more help for small businesses.

Mnuchin and House of Representatives Speaker Nancy Pelosi were due to talk about COVID-19 aid and government funding, which expires this month.

Meanwhile, a bipartisan group of U.S. lawmakers unveiled a $ 908 billion COVID-19 relief bill aimed at breaking the months-long standoff between Democrats and Republicans over new emergency aid for small businesses, the unemployed, airlines and other industries during the pandemic.

The Dow Jones Industrial Average rose 0.92% to 29,910.46 points, while the S&P 500 gained 1.42% to 3,673.05.

The Nasdaq composite added 1.55% to 12,387.57.

The three major stock indexes gained more than 10% in November.

Also in Tuesday’s session, Zoom Video Communications Inc fell 15% after warning that its gross margins would remain under pressure by 2021.

Tesla Inc rose 2.4% after the S&P Dow Jones Indices said it would add one of Wall Street’s most valuable companies to the S&P 500 in one go on December 21, rather than in two pieces.

Micron Technology Inc rose 5.5% as the chipmaker increased its forecast for first quarter revenue, gross margin and profit.

Rising issues outnumbered falling issues on the NYSE by a ratio of 2.63 to 1; on the Nasdaq, a ratio of 1.55 to 1 favored the advancers.

The S&P 500 posted 48 new 52-week highs and no new lows; the Nasdaq Composite recorded 175 new highs and seven new lows.

Additional reporting by Shriya Ramakrishnan and Medha Singh in Bengaluru; Edited by Richard Chang

Original © Thomson Reuters

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