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Nov. 24, 2020, 4:18 p.m. EST

Dow ends above 30,000 for first time on progress toward a coronavirus vaccine and a Biden administration

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William Watts and Sunny Oh

U.S. stocks closed sharply higher Tuesday, with the Dow surpassing the 30,000 landmark, as investors cheered progress towards a COVID-19 vaccine and towards the inauguration of a Biden administration.

However trading volumes were expected to remain subdued ahead of the Thanksgiving holiday on Thursday when markets will be closed, with only half a day of trading scheduled for Friday.

On Monday , stocks finished decisively higher on vaccine news:

The crossing of the 30,000 threshold for the Dow on Tuesday, while underscoring the strength of the stock-market rally, has no significance in itself, analysts noted.

See : The Dow just eclipsed a milestone at 30,000 as stock market rallies

“In my view, it is far more interesting to compare the price of an index to the fundamental characteristics (earnings, sales, book value) of the companies within it,” said Brian Levitt, global market strategist at Invesco, in a note.

He noted that in 1999, when the Dow first hit 10,000, the average was trading at nearly 30 times earnings per share — a once-in-a-generation high. When it next hit 10,000 in 2009, the Dow was trading at 12 times earnings, its lowest valuation in nearly 40 years. On Monday, the Dow is trading at 29 times per share.

Still, President Donald Trump called the 30,000 mark a “sacred number ” shortly after the milestone was reached.

Upward momentum for equity markets, and especially shares in more cyclical industries like energy that were the slowest to rally since March, was being attributed in part to the Trump administration clearing the way for President-elect Joe Biden’s transition to the White House.

“Vaccine expectations along with political certainty has buoyed the cyclical trade,” said Todd Jablonski, chief investment officer at Principal Global Asset Allocation, in an interview.

Although investors have been preparing for a Biden presidency, the move eases worries over a bumpy transition even as Trump continues to refuse to concede the race. Meanwhile, Trump’s efforts to overturn the results of the Nov. 3 election have met a series of legal defeats and setbacks.

Analysts said investors continue to shrug off the surge in COVID-19 cases, and their potential near-term economic impact, as they focus instead on positive developments toward a vaccine and the prospect that companies whose earnings have suffered during the pandemic may revive.

“The marketplace has been looking through the negatives of the virus impact and are seeing the light at the end of the tunnel,” said David Norris, a portfolio manager at TwentyFour Asset Management, in an interview.

Markets may also have received a boost from reports late Monday that former Federal Reserve Chairwoman Janet Yellen is Biden’s pick for Treasury secretary .

Yellen is considered an experienced economist and administrator who helped the markets and the economy navigate the recovery from the 2008 financial crisis. She would be the first woman to serve as U.S. Treasury secretary.

Some analysts see the selection of Yellen as raising the likelihood of further fiscal measures to support the economic recovery from the COVID-19 pandemic.

Gains for markets on Monday were mostly fueled by fresh reports on progress toward a vaccine, with the University of Oxford and  AstraZeneca  saying their coronavirus vaccine candidate was found to  have as much as a 90% efficacy rate  in preventing infections without serious side effects in a late-stage trial.

Progress on COVID-19 vaccines has buttressed optimism on Wall Street at a time when coronavirus cases are rising in 45 U.S. states. The global tally for confirmed coronavirus cases climbed to 59.3 million on Tuesday, according to  data aggregated by Johns Hopkins University , while the death toll rose to 1.39 million. The U.S. has the highest case tally in the world at 12.4 million and the highest death toll at 257,707, or more than a fifth of the global total.

The U.S. Case-Shiller House Price Index rose at a 6.6% annual pace in September.

Stocks extended gains, despite a fall in the Conference Board’s consumer-confidence index from 101.4 to 96.1, a three-month low after a record wave of coronavirus cases spurred some cities and states to reimpose restrictions and Americans took greater precautions.

-Mark DeCambre has contributed reporting to this article

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