S&P 500 Index Sets Another High 12/01 16:01
Wall Street kicked off December with more milestones Tuesday after a broad
rally for stocks pushed the S&P 500 and Nasdaq composite to new highs.
(AP) -- Wall Street kicked off December with more milestones Tuesday after a
broad rally for stocks pushed the S&P 500 and Nasdaq composite to new highs.
The S&P 500 gained 1.1%, with Big Tech companies and banks driving a big
part of the rally. The strong opening to December follows a 10.8% surge for the
broad index in November, marking its best month since April. The tech-heavy
Nasdaq climbed 1.3%. Both indexes beat the record highs they set on Friday.
Treasury yields also rose in another sign of optimism from investors.
Stocks have been ramping higher in recent weeks as investors focus on the
possibility that coronavirus vaccines could soon help usher in a fuller global
economic recovery. Lawmakers in Washington are debating once more whether to
deliver another round of coronavirus relief to the economy before President
Donald Trump leaves office.
"It seems like both the House and the Senate are trying to break this
logjam," said Sameer Samana, senior global market strategist at Wells Fargo
Investment Institute. "It seems the market is feeding off that."
The S&P 500 rose 40.82 points to 3,662.45. The Dow Jones Industrial Average
gained 185.28 points, or 0.6%, to 29,823.92. The Nasdaq climbed 156.37 points
to 12,355.11. Small company stocks also added to their recent gains. The
Russell 2000 index picked up 16.23 points, or 0.9%, to 1,836.05.
While the economic recovery has been stunted by a resurgence of the virus,
investors are looking past much of that because of good progress on vaccine
development. The Organization for Economic Cooperation and Development said in
a report that the world economy will bounce back to its pre-pandemic levels by
the end of next year, though the recovery will be uneven across the countries
and many risks remain.
Investors are betting the economy will begin to turn around next year as
pharmaceutical companies come closer to delivering vaccines to a world beaten
down by the COVID-19 pandemic. Several have reported encouraging data recently
suggesting their vaccine candidates are highly effective.
European regulators could approve a coronavirus vaccine developed by
drugmakers Pfizer and BioNTech within four weeks. The companies have already
asked for approval to begin vaccinations in the U.S. in December. Moderna is
also asking U.S. and European regulators to allow emergency use of its COVID-19.
Traders are also holding out hope that Democrats and Republicans may reach a
deal on some amount of economic stimulus for the economy before 2021, but the
parties remain divided on the details and the cost.
Unemployment remains high as the COVID-19 outbreak widens the gulf between
average people and the wealthiest Americans. The virus, which has claimed more
than 269,000 lives nationwide, is resurgent across the country amid holiday
travel and colder weather sending people indoors.
President-elect Joe Biden on Tuesday repeated calls for Congress to pass
immediate pandemic relief funding even before he takes office.
The coronavirus vaccine optimism, plus economic data that, while uneven,
continue to point to a recovery, low interest rates and now signs that
Washington might take another stab at a stimulus bill are giving investors a
green light to push stocks to new highs, said Samana.
"When you take it all together and piece it into a mosaic, to a lot of
investors it seems like there's no way to lose if all of these tailwinds are
conspiring to drive equities higher," he said, adding the market's upward push
may be getting "a bit overdone."
Roughly 76% of the companies in the S&P 500 rose Tuesday, as did every
sector in the index, except for industrials. Technology stocks led the way
higher, with the Big Tech companies notching gains. Apple rose 3.1% and
Microsoft gained 1%. Facebook climbed 3.5%, while Netflix added 2.8%. Google
parent Alphabet rose 2.3% and Amazon gained 1.6%.
Banks, health care stocks and companies that rely on direct consumer
spending also helped drive the market higher. JP Morgan Chase gained 1.6% and
Pfizer rose 2.9%.
Early in Wall Street's recovery this spring, it was Big Tech that almost
singlehandedly carried the market higher on expectations that work-from-home
and other trends would mean bigger profits for them. But hopes for a vaccine
and return to economic normalcy have been helping boost stocks of companies
whose profits are more closely tied to the economy's strength.
The yield on the 10-year Treasury rose to 0.93% from 0.83% late Monday, a
big move. The higher yields are also helped bolster banks, which rely on higher
bond yields to charge more lucrative interest on loans.
European and Asian markets rose.