Published on 2/07/2020 8:38:24 AM | Source: Reuters

Wall Street gains on vaccine hopes, improving economic data

Posted in Top News| #Wall Street #World Market

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By Pawel Goraj and Devik Jain

Wall Street's main indexes gained on Wednesday as rising hopes of a safe and effective COVID-19 vaccine allayed some fears of another round of lockdowns following a record surge in coronavirus cases in the United States.

A COVID-19 vaccine developed by Pfizer Inc and German biotech firm BioNTech showed promise and was found to be well tolerated in early-stage human trials, the companies said.

Pfizer's shares rose about 5% on the news, one of the biggest boost to the S&P 500 index, while BioNTech gained 7%, helping improve the mood on Wall Street after the United States registered 47,000 new coronavirus cases on Tuesday, the biggest one-day spike since the start of the pandemic.

Updates on the progress in various COVID-19 vaccine programs are being closely watched by investors, and have been partly responsible for Wall Street's recent rally.

The S&P 500 closed its best quarter since 1998 on Tuesday fueled also by unprecedented levels of fiscal and monetary stimulus.

Some people in the markets are kind of just looking at COVID-19 data, said Tim Shaler, chief economist for iTrustCapital in Newport Beach, California. "This is easily the primary driver for the markets going forward, nothing comes close."

Investors have also focused on signs of an economic recovery with the easing of coronavirus-induced lockdowns. Data on Wednesday showed a slump in global manufacturing was easing in June, with U.S. figures hitting their highest level in more than a year.

The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 52.6 last month from 43.1 in May, ending three straight months of contraction, or readings below 50.

On Thursday, all eyes will be on the Labor Department's nonfarm payrolls report.

"The manufacturing number adds a boost to investor confidence. And now the market is positioning itself in anticipation for tomorrow's numbers," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

The ADP National Employment Report on Wednesday showed U.S. private payrolls increased by 2.369 million jobs, but still less than expected in June.

At 1:06 p.m. ET, the Dow Jones Industrial Average was up 42.20 points, or 0.16%, at 25,855.08, the S&P 500 was up 18.39 points, or 0.59%, at 3,118.68. The Nasdaq Composite was up 87.58 points, or 0.87%, at 10,146.35.

Drugmaker Amgen Inc rose 7.5% after a federal appeals court upheld two patents for the drugmaker's multibillion-dollar rheumatoid arthritis drug Enbrel.

FedEx Corp jumped 14.3% after posting better-than-expected quarterly profit and revenue, helped by a surge in pandemic-fueled home deliveries.

Advancing issues outnumbered decliners for a 1.13-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.22-to-1 ratio on the Nasdaq.

The S&P index recorded 15 new 52-week highs and no new low, while the Nasdaq recorded 70 new highs and 10 new lows.

(Reporting by Pawel Goraj in Gdansk, Devik Jain and Ankur Banerjee in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)