By Noel Randewich
(Reuters) – The S&P 500 and Nasdaq Composite indexes jumped to record highs on Tuesday, with investors betting a COVID-19 vaccine will be available soon, and more confident about a speedy economic recovery following upbeat Chinese factory data.
Investors are closely following updates on a handful of vaccine candidates as well as the start of global shipments as drugmakers submit paperwork for regulatory approvals.
Pfizer Inc gained about 3% after the drugmaker 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 also applied for emergency approval from the European regulator. Its stock tumbled 9%, receding from a record high the day before.
“There is this optimism about what it means as we see news around vaccines emerge,” said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.
“As we look toward a health solution, we could be sitting on a coiled spring of economic activity, but it could take a while for it to be unleashed.”
Earlier in the day, global equities got a boost from data that showed China’s factory activity in November increased at its fastest pace in a decade. Several other countries also reported sharp upticks in factory activity.
In the United States, a slowdown in manufacturing activity for the month failed to discourage investors.
All 11 S&P 500 sector indexes rose, with communication services jumping 2.4% and leading gains.
Investors were also focused on remarks by U.S. Treasury Secretary Steve Mnuchin and Federal Reserve Chair Jerome Powell at the Senate Banking Committee, where they agreed on the need for more aid for small businesses.
Mnuchin and House of Representatives Speaker Nancy Pelosi were due to speak about COVID-19 relief 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 a months-long deadlock between Democrats and Republicans over new emergency assistance for small businesses, unemployed people, airlines and other industries during the pandemic.
The Dow Jones Industrial Average was up 0.92% at 29,910.46 points, while the S&P 500 gained 1.42% at 3,673.05.
The Nasdaq Composite added 1.55% to 12,387.57.
All three main stock indexes gained more than 10% in November.
Also in Tuesday’s session, Zoom Video Communications Inc tumbled 15% after warning its gross margins would remain under pressure going into 2021.
Tesla Inc rose 2.4% 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, rather than in two chunks.
Micron Technology Inc advanced 5.5% as the chipmaker increased its revenue, gross margin and earnings forecast for the first quarter.
Advancing issues outnumbered declining ones on the NYSE by a 2.63-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favored 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; Editing by Richard Chang)
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