U.S. stock indexes closed modestly higher on Wednesday, as investors focused on COVID-19 vaccine hopes and early signs of an upswing in business activity during the pandemic.
Investors also bid equities higher as the first few corporate earnings reports for the second quarter have come in better than expected, even as the number of coronavirus cases rise in many U.S. states.
What did major indexes fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.58% advanced 227.44 points, or 0.9%, to end at 26,870.03, after briefly rising as high as 27,071.33 at the start of the session. The S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.31% rose 29.04 points, or 0.9%, to close at 3,226.56, or 0.1% away from erasing its year-to-date losses. The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.92% finished 61.91 points higher, or 0.6%, at 10,550.49.
The Dow on Tuesday gained 556.79 points, or 2.1%, to end at 26,642.59, while the S&P 500 advanced 42.30 points to finish at 3,197.52, a gain of 1.3%, as energy shares and materials shares rallied. The Nasdaq Composite index closed with a gain of 97.73 points, or 0.9%, to settle at 10,488.58.
Year-to-date, the Dow is down 1668.34 points or 5.85%(rounded), while the S&P 500 is down 4.22 points or 0.13% but the Nasdaq Composite is up 1577.89 points or 17.59%.
What drove the market
U.S. stock indexes finished higher Wednesday, as investors focused on the race for a coronavirus vaccine and a modest upswing in business activity during the pandemic, rather than rising cases of the deadly virus.
“It’s this big tug-of-war, basically between the recovery and reclosing,” Mike Bailey, director of research at FBB Capital Partners, told MarketWatch.
“Today is a vaccine day for sure. And that’s a marginal win for the bulls, but a big pushback is valuations,” he said. “Investors are concerned that we are way too high, relative to the economy.”
The Federal Reserve reported on Wednesday that economic activity increased in nearly all its districts from its prior report in May, but still was far below levels prior to the COVID-19 pandemic, according to the anecdotal account of business activity in the central bank’s regions, referred to as the Beige Book.
Business owners also said they were concerned about how long the pandemic might last, and whether a new wave of layoffs might be necessary if the economy doesn’t improve sharply and fresh fiscal stimulus isn’t provided.
Helping to offset those worries was news from Moderna Inc. /zigman2/quotes/205619834/composite MRNA -1.62% , which said its coronavirus vaccine candidate produced a “robust” immune-system response in a larger group of people and that the study would move to a clinical trial in July.
Also U.K. television broadcaster ITV reported that positive news may come Thursday on initial trials of the Oxford Covid-19 vaccine that is backed by AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN +0.01% /zigman2/quotes/200304487/composite AZN +0.03% .
“As the race for a COVID-19 vaccine makes progress, this has allowed investors to look beyond the surge in cases in the hope that economic recovery will continue to endure,” said Michael Arone, chief investment strategist at State Street Global Advisors, in an interview with MarketWatch.