The Dow Jones Industrial Average brushed off early losses to trade higher by 79 points, or 0.3%, near 29,501. The S&P 500 index advanced 28 points to reach 3,573, for a gain of 0.8%. The Nasdaq Composite Index jumped 182 points, or 1.6%, to trade near 11,736.
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%.
This weekâ€™s promise of a viable vaccine candidate for COVID-19 has powered the Dow to near all-time highs and prompted a rotation 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 afterÂ PfizerÂ andÂ BioNTechÂ on Monday announced that their experimental vaccine showed a 90% efficacy in a Phase 3, or late-stage, study.
The pharmaceutical partners on WednesdayÂ announced a dealÂ to provide a supply of 200 million doses of its vaccine candidate to the European Union, marking the largest order for the potential vaccine to date.
Also on Monday,Â Eli Lilly & Co.â€™s COVID-19 antibody treatment was approved for emergency use 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.
â€œIâ€™m more bullish,â€ said Don Calcagni, chief investment officer for Mercer Advisors. â€œThe marketâ€™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, itâ€™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.â€
Goldman Sachs strategists, led by David Kostin, see the vaccine as a more important development for the economy and markets than theÂ prospective policies of a Biden presidency. â€œThe divisive U.S. presidential campaign was actually a backdrop to the main event: a public health crisis that has tragically claimed 240,000 lives in the U.S. since it began. However, within less than a year, a vaccine has been discovered,â€ they wrote.
GoldmanÂ boosted its year-end price target on the S&P 500Â 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.
To be sure, the pandemic now has infected more people and surpassed its previous peak in the spring. The global tally for confirmed cases of COVID-19 cases climbed to 51.5 million Wednesday, according toÂ data aggregated by Johns Hopkins University, while the death toll rose to 1.3 million.
TheÂ U.S. has the highest case tallyÂ in the world at 10.3 million and highest death toll at 239,695 or about a fifth of the global totals. The U.S. counted another 139,855 cases on Tuesday, and at least 1,448 people died,Â according to a New York Times tracker.Â
With the spread accelerating, some strategists worry that the stock buying enthusiasm earlier in the week may fade.
â€œOptimism surrounding the potential Covid-19 vaccine is still lifting equity markets, but the bullish sentiment has cooled,â€ wrote David Madden, market analyst at CMC Markets, in a note.
â€œMassive gains were racked up in the past two sessions so it is hardly surprising that the buying frenzy has faded. Commodity, banking, supermarkets, and leisure stocks are up on the day, but the gains are far more modest than what was witnessed earlier in the week,â€ he wrote.
Mercerâ€™s Calcagni thinks any signs of a rotation toward value stocks is premature. â€œWeâ€™ve all been predicting that rotation for a long time,â€ he said in an interview with MarketWatch. But there are still a few hurdles to get past, he said, including the early January run-off elections for Georgia senators, which will determine whether Washington remains divided politically, a more favorable outcome for investors, in his view.
There are no U.S. economic reports on tap on Wednesday due to the government holiday.
The pan-European Stoxx 600 Europe Index Â jumped 1.1%, while Londonâ€™s FTSE 100 Â was up 1.3%, even asÂ European Central Bank chief Christine Lagarde urged patienceÂ over vaccine prospects.
Oil futuresÂ took a cue from the vaccine-inspired rally, with the U.S. benchmark Â rising 1.7%, or $0.73, to $42.08 per barrel.Â Gold slipped 0.8% to $1,861.60 an ounceÂ as bond yields gathered steam.
The ICE U.S. Dollar Index, Â a measure of the currency against a basket of six major rivals, was 0.4% higher.
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