NEW YORK, Nov 17 — The S&P 500 and Dow Jones industrial average notched record closing highs yesterday as news of another promising coronavirus vaccine fanned hopes of eradicating Covid-19, while spiking infections and new shutdowns threatened to hobble a recovery from the pandemic recession.
All three major US stock indexes advanced and with its new closing record, the blue-chip Dow is the last of the three to reclaim levels reached in February, before lockdowns sent the markets into free-fall.
The Russell 2000 also hit an all-time closing high.
Value, cyclical and small cap shares outperformed the broader market.
Moderna Inc said its experimental Covid-19 vaccine was 94.5 per cent effective in preventing infection based on interim late-state data. It was the second drugmaker in as my weeks, after Pfizer Inc, to announce promising trial data in the development of a vaccine to defeat the pandemic. Its shares gained 9.6 per cent on the day.
Combined, pending further data and regulatory review, the United States could have as many as 60 million emergency doses available this year.
"More vaccine news is driving cyclicals, small caps and value, which would be primed if the economy reopens sooner than expected, returning us to some sense of normalcy," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
Travel-related stocks, which have been clobbered by restrictions to contain the pandemic's spread, were in demand.
Shares of United Airlines Holdings Inc, American Airlines Group Inc, Carnival Corp and Norwegian Cruise Line Holdings Ltd jumped between 4.5 per cent and 9.7 per cent.
But Covid-19 continued its US rampage, with cases surging past 11 million and record infections in 40 states, prompting states to tighten social distancing mandates.
“Wall Street is looking out six to 12 months down the road,” Pavlik added. “There is a question about ... what kind of damage will be inflicted on the economy between now and then.”
The Dow Jones Industrial Average rose 470.63 points, or 1.6 per cent, to 29,950.44; the S&P 500 gained 41.76 points, or 1.16 per cent, at 3,626.91; and the Nasdaq Composite added 94.84 points, or 0.8 per cent, at 11,924.13.
Of the 11 major sectors of the S&P 500, all but healthcare ended the session in the black, with energy stocks enjoying the largest percentage gain.
Earnings from high-profile retailers are expected this week, with Walmart Inc and Home Depot Inc expected to report today and Lowe's Companies Inc and Target Corp tomorrow.
This, together with the Commerce Department's October retail sales data, expected today, should provide evidence of how consumers are weathering a languid economic recovery as stimulus runs dry.
Simon Property Group Inc jumped 5.7 per cent after the biggest US mall operator cut its purchase price for an 80 per cent stake of rival Taubman Centers Inc, as the pandemic pressures the retailers.
Advancing issues outnumbered declining ones on the NYSE by a 4.66-to-1 ratio. On Nasdaq, a 2.55-to-1 ratio favoured advancers.
The S&P 500 posted 40 new 52-week highs and no new lows. The Nasdaq Composite recorded 162 new highs and 15 new lows.
Volume on US exchanges was 10.90 billion shares, compared with the 10.21 billion average for the full session over the last 20 trading days. — Reuters
