The Dow Jones Industrial Average clinched its 13th record close of the year Wednesday, lifted by a climb in Walt Disney shares and bets on a rapid economic recovery.
The recent signing of a coronavirus aid bill and rollout of vaccines have bolstered expectations that the economy will quickly rebound from the pandemic, fueling gains in everything from entertainment companies to raw materials producers.
The blue chips added 73.89 points, or 0.2%, to 30409.56. The S&P 500 gained 5.00 points, or 0.1%, to 3732.04, while the tech-heavy Nasdaq Composite rose 19.78 points, or 0.2%, to 12870.00.
Together the three indexes have notched 100 record closes in 2020, the most in a year since 2017, according to Dow Jones Market Data.
Major indexes are on course to finish 2020 with sizable gains, even as the coronavirus pandemic continues to weigh on the economy. The S&P 500 is up 16% for the year, while the Nasdaq Composite has advanced 43%. And many investors believe the rally is poised to continue in the new year.
â€œThe fundamental tailwinds that have propelled the market to all-time highs are still going to be in place next week and over the course of 2021,â€ said Hank Smith, head of investment strategy at Haverford Trust. â€œExtraordinary monetary policy, extraordinary fiscal stimulus, an economy that is poised to surge.â€
The vaccine rollout and passage of the new $900 billion fiscal stimulus package have buoyed investorsâ€™ sentiment in recent weeks. But the ongoing pandemic, weakening economic data and debate in Washington over the size of stimulus checks has tempered some of that optimism.
â€œWe are going to keep getting this push-pull, vaccine versus virus, politics versus economics, for a while yet,â€ said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. â€œNovember was a great month for markets and there was always going to be a pause for breath. December seems to be just that.â€
Disney shares gained $3.87, or 2.2%, to $181.17, boosting the Dow industrials. Dow Inc. added $1.14, or 2.1%, to $55.47.
Energy and materials shares were the top-performing sectors in the S&P 500, both rising more than 1%. Freeport-McMoRan shares climbed $1.79, or 7.2%, to $26.53, while Devon Energy added 83 cents, or 5.4%, to $16.14.
Shares of AstraZeneca slipped 0.8% in London trading after the U.K. approved a coronavirus vaccine developed by the company and the University of Oxford. The inoculation is the third Western-developed vaccine to receive emergency-use approval this month, and comes as cases rise sharply in the U.S. and Europe.
â€œThere is a lot riding on the AstraZeneca vaccine in particular, much more than any other vaccine on a global level,â€ said Hani Redha, a multiasset portfolio manager at PineBridge Investments. â€œJust the sheer number of doses there will be and the fact that distribution of it is easier, particularly in developing countries, makes it important,â€ he added.
Money managers are largely looking beyond the near-term challenges posed by the pandemic and betting that the vaccines will enable governments to begin easing restrictions and offer fresh momentum to the economic rebound. Still, some investors note that risks remain.
â€œInvestors canâ€™t force themselves to imagine what happens if the vaccine solution isnâ€™t a wild success,â€ said Felipe Toews, chief executive at Toews Asset Management. â€œThat would be a very big thing that could have a massive impact on the markets.â€
In bond markets, the yield on the 10-year U.S. Treasury note edged down to 0.926% from 0.934% on Tuesday.
Overseas, the Stoxx Europe 600 ticked down 0.3%. In Asia, most major indexes closed higher. Hong Kongâ€™s Hang Seng Index gained 2.2%; the Shanghai Composite rose 1%.
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