The S&P 500 and Nasdaq Composite rose on Wednesday as traders bought back into tech names that were hard hit earlier in the week.
The S&P 500 climbed 0.9% while the tech-heavy Nasdaq advanced 2%. The Dow Jones Industrial Average struggled, falling 71 points, or 0.2%.
Apple gained 3%. Netflix climbed 1.1%. Facebook and Amazon rose 1.1% and 3%, respectively. Alphabet traded 0.8% higher and Microsoft was up by 2.9%.
Wednesday’s moves came after strong back-to-back strong sessions for the Dow that were sparked by Pfizer and BioNTech’s announcement about their more than 90% effective Covid-19 vaccine.
The news caused investors to move out of technology names and stay-at-home stocks and into cyclical stocks that hinge on a recovering economy.
“An abrupt macro positive shock such as we saw this week can lift all value stocks for a time,” Inigo Fraser-Jenkins, co-head of the portfolio strategy team at Bernstein, wrote in a note. “However, we think that the outlook for the next year has to be more nuanced.”
“Real yields are likely to be held low and there is still a greater longevity of growth for high Growth companies, thus we think it is right to remain overweight Growth companies where [it is reasonable] to believe their growth can be sustained,” Fraser-Jenkins said.
The energy sector is up 17% this week, as oil prices gain on hopes of improving demand. The financial sector has risen about 8% since Monday. Both sectors were under pressure on Wednesday, however. Energy dipped 0.1% and financials slid about 1%.
Eli Lilly’s antibody drug was cleared by the Food and Drug Administration for emergency use late Monday. The agency said the drug could be used to treat mild-to-moderate cases of Covid-19 in patients who are older than 12 years old.
“What you saw this week really encapsulated what the market is focuses on, and that’s really focus on the health side,” said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “You certainly saw a dramatic reaction in the equity market and the bond market was pulled into that as well.”
The bond market was closed Wednesday due to the Veterans Day holiday. Earlier this week, however, the 10-year Treasury yield hit its highest level since March as traders sold Treasurys.
The vaccine and antibody drug news comes as the United States once again topped its prior day record of daily new Covid-19 infections, on a seven-day average, while also crossing the bleak milestone of more than 10 million cases nationwide on Monday. The seven-day average of daily new cases Monday was 108,964, a 37% increase from a week ago, according to a CNBC analysis of data from Johns Hopkins University.
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