The Dow Jones Industrial Average rose slightly 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 0.4% as Apple, 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 more than 4% as the Federal Aviation Administration lifted its ban on its 737 Max after a 20-month grounding following two deadly crashes.
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 successful 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.
“For the most part, the economy has been recovering faster than many expected, as consumer spending has held up quite well throughout the crisis,” Charlie Ripley, senior investment strategist for Allianz Investment Management, said in a note. “Much of this can be seen through consumer spending habits, where the pandemic has caused consumers to shift spending away from service-oriented products and into to more goods-related products.”
“While this has been beneficial to the economy overall, it has created a bifurcated recovery, as some sectors of the economy continue to be extremely depressed,” he added.
Equities are rising amid a backdrop of worsening Covid-19 infections in the U.S. The U.S. seven-day average of daily new Covid-19 infections surpassed 150,000 for the first time on Monday, according to a CNBC analysis of Johns Hopkins data. Retail sales came in lower-than-expected for October as millions of Americans lost their unemployment benefits amid the surge in cases.
Lowe’s shares dropped 6% after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates.
A slew of other retailers report quarterly earnings on Wednesday, with chipmaker Nvidia, Copa Holdings and L Brands set to release earnings following Wednesday’s session.
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