By Joe Wallace 

U.S. stocks are on track to complete a banner November, giving the Dow Jones Industrial Average its best month in more than 33 years, as investors cheer the prospect of Covid-19 vaccines halting the pandemic and fresh stimulus spending to bolster the economy.

The blue-chip average fell 176 points, or 0.6%, to 29734 shortly after the opening bell. The index remains up roughly 12% for the month.

The S&P 500 lost 0.2% but was still on course for its biggest one-month gain since April. The Nasdaq Composite added 0.2%.

Stocks have soared in November, at one point pushing the Dow over 30000 for the first time and putting the benchmark on course for potentially its biggest one-month advance since January 1987. Shares of companies that had suffered most from the pandemic, such as energy producers and banks, have posted steep gains. The Russell 2000 index of small-cap stocks is also on pace for its best month since its 1984 inception.

Two main factors have fueled the latest leg up in markets, according to investors. The development of three vaccines in the West has opened up the possibility that the economic disruption caused by the coronavirus will end in 2021. Signs that President-elect Joe Biden will make a relatively smooth transition into the White House have doused some of the political uncertainty that had fed into heightened market volatility in the fall.

The surge of coronavirus infections in the U.S. and the possibility for logistical hiccups in the distribution of the shots could lead to bouts of selling. Still, money managers expect investors to view any declines as a buying opportunity.

"We've got a lot of very good vaccine news," said Daniel Morris, chief market strategist at BNP Paribas Asset Management. "We should, for the most part, move up between now and the end of the year, with a chance for a setback here or there.

Shares of drugmaker Moderna jumped 16% Monday after saying it would ask U.S. and European health regulators on Monday to authorize use of the company's Covid-19 vaccine.

IHS Markit rose 6.3% after the data provider said it would combine with S&P Global in a deal that values IHS Markit at $44 billion, including debt. The all-stock deal is the largest of the year.

One risk for stocks in the coming months stems from exuberance among individual investors, said Trevor Greetham, head of multi asset at Royal London Asset Management, pointing to surveys by the American Association of Individual Investors. Still, the U.K. asset manager is betting that a revival in economic activity will continue to buoy stock prices in 2021.

The prospect of vaccines offers "some light at the end of the tunnel as an investor," Mr. Greetham said. "If you're buying stocks, you're not just assessing the next month or two -- you're assessing the next 20 years."

In Asia, investors were rattled by a Reuters report that the Trump administration is poised to add oil producer Cnooc and chip maker Semiconductor Manufacturing International to a blacklist of alleged Chinese military companies. Cnooc shares tumbled 14% in Hong Kong, while SMIC's Hong Kong-listed stock fell 2.7%.

Most major markets in the region ended lower. Hong Kong's Hang Seng lost 2.1%, Japan's Nikkei 225 retreated 0.8% and the Shanghai Composite Index lost 0.5%.

Markets are concerned about more restrictions from the U.S. on investing in Chinese companies, according to Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong.

"Some investors would rather stay on the sidelines awaiting more clarity on vaccine developments and U.S. policy directions as the nation transits to new leadership," Mr. Leung said.

Banks and energy producers dropped in Europe, weighing on the Stoxx Europe 600, which hovered around the flatline.

--Joanne Chiu and Akane Otani contributed to this article.

Write to Joe Wallace at Joe.Wallace@wsj.com

(END) Dow Jones Newswires

November 30, 2020 10:02 ET (15:02 GMT)

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