By Shriya Ramakrishnan and Medha Singh
(Reuters) – The S&P 500 and the Nasdaq hit record highs on Tuesday as hopes that a COVID-19 vaccine will be available soon and better-than-expected factory data from China bolstered bets of a speedy economic recovery.
Investors are closely following updates on a handful of leading vaccine candidates as well as the start of global shipments as drugmakers submit paperwork for regulatory approvals.
Pfizer Inc gained about 5% as the drugmaker and Germany’s BioNTech SE sought emergency approval of their vaccine candidate from the European regulator.
The partners are now neck-and-neck with rival Moderna, which jumped 11% after announcing it would ask the regulator to recommend conditional approval for its shot.
“The optimism continues to build for a vaccine to come out and be very successful… There is this expectation that you’re going to see a global synchronized recovery next year,” said Larry Adam, chief investment officer at Raymond James.
Investors overlooked data showing U.S. manufacturing activity slowed in November amid a rise in COVID-19 infections that has prompted state-wise restrictions, with California considering new “stay-at-home” orders.
All major S&P sectors rose with economically-sensitive energy and financials leading gains.
The Dow wrapped up its best month in more than three decades on Monday as breakthroughs in vaccine spurred a shift toward sectors hardest-hit by virus induced shutdowns. At 10:08 a.m. ET, the Dow Jones Industrial Average rose 409.86 points or 1.38% to 30,048.50, the S&P 500 gained 49.33 points, or 1.36% to 3,670.96 and the Nasdaq Composite gained 136.25 points or 1.12% to 12,334.61.
Earlier in the day, China’s better-than-expected factory data lifted global equities. Several other countries also reported sharp upticks in factory activity.
Investors will focus on remarks from Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell at a congressional hearing, which is likely to highlight divisions over what more should be done in response to the pandemic.
Among other stocks, Zoom Video Communications Inc tumbled 12% after the company warned its gross margins would remain under pressure going into 2021.
Tesla Inc rose about 3% after S&P Dow Jones Indices said it would add one of Wall Street’s most valuable companies to the S&P 500 index all at once on Dec. 21.
Micron Technology advanced 5% as the chipmaker increased its revenue, gross margin and earnings per share guidance for the first quarter of 2021.
Advancing issues outnumbered decliners by a 5-to-1 ratio on the NYSE and by a 2.3-to-1 ratio on the Nasdaq.
The S&P 500 posted 31 new 52-week highs and no new low, while the Nasdaq recorded 212 new highs and seven new lows.
(Reporting by Shriya Ramakrishnan and Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)
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