The Dow Jones Industrial Average rose on Wednesday boosted by a pop in Boeing shares, while investors digested more positive news on the coronavirus vaccine front.
The 30-stock Dow gained 100 points in the volatile session, while the S&P 500 traded near the flat line. The Nasdaq Composite fell 0.1% as Amazon, Microsoft and Alphabet all came under pressure.
Pfizer released the final data on its vaccine candidate with BioNTech, which turned out even better than the initial data. The companies said the vaccine was 95% effective in preventing Covid-19 and fended off severe infection in the trial, adding that it plans to submit an application for emergency use authorization “within days.”
Dow-member Boeing jumped as much as 4% as the Federal Aviation Administration lifted its ban on its 737 Max after a 20-month grounding following two deadly crashes. The stock last traded up 1.8%.
Meanwhile, Target shares rose about 2% after the retailer’s third quarter earnings topped estimates because of booming digital sales.
“The vaccine announcement has moved the conversation about a return to normal from ‘if’ to ‘when,'” said Bill Callahan, investment strategist at Schroders. “What is most important is that the vaccine announcement removed some of the long term uncertainty, which had kept investors cautious.”
Small-caps continued to outperform on Wednesday with the Russell 2000 gaining 0.6% after reaching a record close on Tuesday.
The major averages suffered their first negative day in three in the previous session. The Dow fell more than 150 points, while the S&P 500 lost 0.5%. The Nasdaq dipped just 0.2% amid a pop in Tesla shares following announcement that the electric vehicle company will join the S&P 500.
Stocks are having a strong month on the back of positive developments about Covid-19 vaccines. The Dow is up more than 12% and the S&P 500 is up more than 10% in November. The Nasdaq Composite is up more than 9%, lagging as investors ditch technology shares for cyclical plays.
“The cyclical/value rotation continues as that cohort enjoys mild outperformance,” Adam Crisafulli, the founder of Vital Knowledge, said in a note on Wednesday. “The retail earnings in the last 36 hours have all revealed favorable consumer tailwinds, but not all those stocks saw gains.”
Lowe’s shares dropped 6% after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates.
The U.S. is grappling with worsening Covid-19 infections ahead of a likely tough winter. The country is recording roughly 157,000 new Covid cases per day, on average, as of Tuesday, according to a CNBC analysis of Johns Hopkins data. That’s another new record and nearly 30% higher than infection levels a week ago.
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