NEW YORK (Reuters) – U.S. stocks advanced and crude prices extended their rally on Wednesday, on hopes of potential COVID-19 vaccines and economic revival, though spiking coronavirus infections raised the specter of new lockdowns and dampened investor optimism.
The blue-chip Dow was only nominally higher.
A return to tech-focused market leaders, which thrived during COVID shutdowns but sold off earlier in the week as investors pivoted to economically-sensitive cyclical stocks, put the Nasdaq out front.
“It’s a pause in the pivot,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “We’re seeing some profit-taking and tech is rebounding, possibly from an oversold condition.”
The prospect of a return to normal appeared to grow after Pfizer Inc’s announcement on Monday that its COVID-19 vaccine candidate, developed with BioNTech, showed a 90% success rate in preventing infection during trials.
The news stoked investor risk appetite across the board, and sent oil prices, building on two straight sessions of sharp gains, higher.
But the optimism could be waning. The Dow Jones Transportation index, seen by many as a barometer of broader economic health, was sharply lower.
While on Tuesday the yield of benchmark U.S. 10-year Treasuries reached the highest level since March, The U.S. bond market was closed on Wednesday in observance of Veterans’ Day.
The Dow Jones Industrial Average rose 8.31 points, or 0.03%, to 29,429.23, the S&P 500 gained 19.19 points, or 0.54%, to 3,564.72 and the Nasdaq Composite added 157.50 points, or 1.36%, to 11,711.35.
The momentum of vaccine hopes boosted European shares higher for the third straight session, offsetting worries over spiking coronavirus infections.
The pan-European STOXX 600 index rose 1.00% and MSCI’s gauge of stocks across the globe gained 0.53%.
Emerging market stocks lost 0.22%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.15% higher, while Japan’s Nikkei rose 1.78%.
Crude oil prices extended their rally, building on gains sparked by the notion of reviving demand and a steeper-than-expected decline in U.S. inventories.
U.S. crude rose 2.9% to $42.56 per barrel and Brent was last at $44.75 per barrel, up 2.61% on the day.
The dollar index gained ground as riskier currencies lost against the greenback.
The dollar index rose 0.43%, with the euro down 0.53% to $1.1751.
The Japanese yen weakened 0.31% versus the greenback at 105.65 per dollar, while Sterling was last trading at $1.3197, down 0.56% on the day.
Gold dipped, hurt by a stronger dollar and increased risk appetite which drew investors away from the safe-haven metal.
Spot gold dropped 0.7% to $1,863.56 an ounce.
Reporting by Stephen Culp; additional reporting by Tom Wilson; editing by Barbara Lewis