U.S. stocks closed higher on Tuesday, with the S&P and Nasdaq setting record highs, in part due to a boost from the healthcare sector on positive COVID-19 vaccine news, while uncertainty over fresh fiscal stimulus held gains in check. The TSX followed in its path, with energy stocks among the biggest advancers despite a very modest pullback in crude oil prices.
Johnson & Johnson rose 1.73% to help lift both the Dow and S&P 500 after the company said it could obtain late-stage trial results of a single-dose COVID-19 vaccine it is developing in January, earlier than expected.
Pfizer Inc advanced 3.18% as it cleared the next hurdle in the race to get its COVID-19 vaccine approved for emergency use, after the U.S. health regulator released documents raising no new safety or efficacy issues.
“You’ve seen from the most recent lows of late October that we’ve been melting up through the first week of December in anticipation of what is coming to fruition at this point, which is now imminent approval of a vaccine and some of that distribution,” said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.
“We’ve seen much of this priced in and pulled forward and now it is all about balancing that push-pull of the current reality of a still somewhat muted economic environment that is dependent upon a health solution and being on the precipice of a health solution.”
Wall Street’s main indexes have traded in a tight range to start the trading week, as investors look for more stimulus in the face of surging COVID-19 cases and fresh restrictions in California.
Senate Majority Leader Mitch McConnell said lawmakers should pass an aid package that includes measures they can agree on while excluding provisions such as liability protections for businesses that are causing division.
The Dow Jones Industrial Average rose 104.09 points, or 0.35%, to 30,173.88, the S&P 500 gained 10.29 points, or 0.28%, to 3,702.25 and the Nasdaq Composite added 62.83 points, or 0.5%, to 12,582.77.
The S&P/TSX Composite Index closed up 56.65 points, or 0.32%, at 17,639.00, as energy stocks rose just over 1%. U.S. West Texas Intermediate (WTI) crude futures settled 16 cents lower at $45.60 a barrel.
Gold rose to a two-week peak on Tuesday, buoyed by growing expectations of more U.S. fiscal stimulus to combat the economic impact of rising coronavirus cases, while a muted dollar added further support. U.S. gold futures settled up 0.5% at $1,874.90.
Investors are closely watching whether policymakers will be able to clinch an agreement on a long-awaited coronavirus relief bill and a $1.4 trillion spending bill, with Friday eyed as a deadline to avoid a government shutdown.
The U.S. Congress will vote this week on a one-week stopgap funding bill to provide more time for lawmakers to reach a deal on both spending and pandemic relief.
Positive developments related to the COVID-19 vaccine have in recent weeks helped investors look past the surge in infections and anticipate an economic rebound next year.
Analysts now expect investor attention to gradually shift from vaccine approvals to their global distribution and any possible side effects that may occur.
Advancing issues outnumbered declining ones on the NYSE by a 1.85-to-1 ratio; on Nasdaq, a 1.80-to-1 ratio favored advancers.
The S&P 500 posted 48 new 52-week highs and no new lows; the Nasdaq Composite recorded 223 new highs and 8 new lows.
Volume on U.S. exchanges was 10.41 billion shares, compared with the 11.48 billion average for the full session over the last 20 trading days.
Read more: Stocks that saw action on Tuesday - and why
Reuters, Globe staff
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