Stocks Rise, Putting S&P 500 On Course for Fresh Record
By Anna Hirtenstein
U.S. stocks rose Tuesday, putting the S&P 500 on course for
a fresh record, as the optimism behind the November market rally
extended into a new month.
The broad U.S. index gained 1.2%, and the tech-heavy Nasdaq
Composite added 1.1%, also on pace for a record. The Dow Jones
Industrial Average advanced 1.2%, or about 361 points, after on
Monday closing out its best month since 1987.
Despite the tumult of 2020, the S&P 500 is up 13% for the
year, while the surge in technology shares has helped the Nasdaq
Investors' sentiment has been buoyed in recent weeks by the
development of Covid-19 vaccines, which could curtail infection
levels and let social and business activity return to pre-pandemic
Pfizer partner BioNTech and U.S. drugmaker Moderna have applied
for their coronavirus vaccines to be approved in the European
Union, the EU's chief medicines regulator said Tuesday.
"The mood of the market is rather optimistic," said Eric
Barthalon, global head of capital markets research at Allianz. "For
the time being, markets have bought the news that vaccines are
going to be rolled out earlier than expected."
Policy makers such as Federal Reserve Chairman Jerome Powell are
paying more attention to potential hurdles in widespread
distribution of the vaccines, and other challenges before the
economy returns to normal, Mr. Barthalon said.
Mr. Powell, in testimony prepared for delivery at a
congressional hearing Tuesday, said the Fed's actions to backstop
credit markets this past spring had unlocked almost $2 trillion to
support businesses, cities and states. Investors are likely to be
watching for further insights into the pace and strength of the
economic recovery when he takes questions from lawmakers. Treasury
Secretary Steven Mnuchin is also expected to testify.
"Officials seem to be paying much more attention to the
implementation risks than markets," Mr. Barthalon said. "There is
clearly a contrast between market expectations and officials'
All 11 S&P 500 sectors rose Tuesday, led by
economically-sensitive groups like energy and financials.
Among individual stocks, Tesla shares rose 4% after S&P Dow
Jones Indices said it would add the car maker's full weight to the
S&P 500 in one move.
Shares in Zoom Video Communications dropped 11%. The
videoconferencing company on Monday signaled that higher sales in
recent months have come with higher costs, disappointing
Moderna shares jumped 12%, extending a rally that saw the stock
climb 20% Monday after the drugmaker said it would ask U.S. and
European health regulators to authorize use of its Covid-19
In bond markets, the yield on the benchmark 10-year U.S.
Treasury note rose to 0.895%, from 0.845% on Monday.
Overseas, the pan-continental Stoxx Europe 600 rose 0.8%.
Surveys on manufacturing activity in many major European economies
on Tuesday showed a broad continued expansion in the eurozone.
"The manufacturing sector is one part of the European economy
that is actually managing to retain some degree of resilience,"
said Michael Hewson, a chief markets analyst at CMC Markets.
"Ultimately it is encouraging, but it doesn't tell us much about
the more vulnerable sectors of the economy like services."
In Asia, most major benchmarks rose by the close of trading. The
Shanghai Composite Index added 1.8%, Hong Kong's Hang Seng advanced
0.9% and Japan's Nikkei 225 climbed 1.3%.
A private gauge of manufacturing activity in China hit its
highest level in a decade in November, signaling a strong recovery
in the world's second-largest economy.
Karen Langley contributed to this article.
Write to Anna Hirtenstein at firstname.lastname@example.org
(END) Dow Jones Newswires
December 01, 2020 10:35 ET (15:35 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.