The Dow Jones Industrial Average ended lower by 23.29 points, or 0.1%, at 29,339.54, snapping a 2-day win streak. The S&P 500 index advanced 27.17 points to close at 3,572.72, notching a gain of 0.8%, its second-highest close ever. The Nasdaq Composite Index surged 232.57 points, or 2%, to finish at 11,786.43, snapping its 2-day losing streak.
On Tuesday, the Dow rose 262.95 points, or 0.9%, to end at 29,420.92, near its previous all-time closing high of 29,551.42 set in mid-February. The S&P 500 fell 4.97 points, or 0.1%, to finish at 3,545.53, while the Nasdaq Composite slipped 159.93 points, or 1.4%, to close at 11,553.86. The small-cap Russell 2000 index rose 1.8%.
Surging U.S. case counts of COVID-19 were a focus on Wall Street Wednesday, along with fresh curfews in parts of the nation that could foretell stricter social-distancing measures to come.
“It looks to me like were coming into a cold, dark winter,” said Jason Ader, CEO of SpringOwl Asset Management, adding that he thinks more cities and states will call for tighter restrictions to stem the accelerating case count, which could hurt the economic recovery.
“The testing is getting better, but the numbers are definitely picking up,” he said, pointing to new curfews on bars and restaurants in New York City and Nevada’s governor calling on residents to stay home for two weeks.
Ader also thinks optimism around a potential vaccine has been partially offset by the difficulties of transporting and administering a leading vaccine candidate to a swath of the population for it to be effective.
“I think everyone is realizing it’s not going to be a flip of the switch,” Ader said of any widespread vaccination campaign.
The pandemic now has surpassed its previous peak in the spring. The U.S. set records for hospitalizations in 17 states, while resulting in new curfews on bars and restaurants in Minnesota, New York City and elsewhere.
The U.S. has the highest case tally in the world at 10.3 million out of 51.5 million globally, as well as the highest death toll at 239,695 or about a fifth of the global totals.
But grim pandemic milestones often have helped lift the stocks of technology giants and the Nasdaq Composite which have benefited from the work-from-home trend and have outshone those of companies suffering from the lockdowns to control the pandemic.
Video: Wall Street points to a higher open following Tuesday’s mixed session (CNBC)
“We’re back to the original trade,” said Anthony Denier, CEO of trading platform Webull, pointing to renewed buying Wednesday of stay-at-home stocks, as well as enthusiasm around Apple Inc.’s new fleet of Macs with custom chips announced Tuesday as catalysts of the Nasdaq Composite’s push higher.
Although, Denier also attributed some of the gains in tech stocks Wednesday to the prospects of a divided U.S. government following last week’s election, which may not “have as big of a bite,” on technology companies in the form of additional regulation or higher taxes. “That takes that uncertainty out of the picture, for at least a couple of years,” he said.
Earlier this week, the promise of a viable vaccine candidate for COVID-19 helped power the Dow to near all-time highs, prompting some investors to rotate from large-capitalization and technology-related shares, more likely to prosper during lockdowns, to stocks that have been the most vulnerable to the social-distancing measures implemented to slow the coronavirus spread.
That rally, and the beginnings of a stock-market rotation, were sparked after Pfizer and BioNTech on Monday announced that their experimental vaccine showed a 90% efficacy in a Phase 3, or late-stage, study. The pharmaceutical partners on Wednesday announced a deal to provide a supply of 200 million doses of its vaccine candidate to the European Union, marking the largest order yet for the potential vaccine.
Eli Lilly & Co.’s COVID-19 antibody treatment also was approved for emergency use on Monday by the U.S. Food and Drug Administration.
Meanwhile, markets have greater clarity on the results of the U.S. presidential election, projected to have been won by former Vice President Joe Biden over incumbent Donald Trump, even as challenges to vote counts continue.
“I’m more bullish,” said Don Calcagni, chief investment officer for Mercer Advisors. “The market’s looking for three things. One, a peaceful transition of power. It looks like we have that, despite the theatrics, it looks like the election system in this country is very robust and works well. Number two, it’s looking to get past COVID. The Pfizer announcement was a huge step in that direction. And the market is also looking for a new relief package. It seems like both parties are aligned toward doing that.”
Goldman Sachs strategists, led by David Kostin, sees the vaccine as a more important development for the economy and markets than the prospective policies of a Biden presidency. Goldman boosted its year-end price target on the S&P 500 index to 3,700 from 3,600. The bank also forecasts 4,300 by the end of 2021 and 4,600 by the end of 2022.
There were no U.S. economic reports on tap on Wednesday due to the government holiday.
The pan-European Stoxx 600 Europe Index closed 1.1% higher, while London’s FTSE 100 rose 1.4%, even as European Central Bank chief Christine Lagarde urged patience over vaccine prospects.
The ICE U.S. Dollar Index, a measure of the currency against a basket of six major rivals, was 0.3% higher.
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Mark DeCambre contributed reporting