By Steve Goldstein
European stocks rose on Tuesday, buoyed by optimism that vaccines will end the coronavirus pandemic, as well as signs of an orderly transition in the U.S.
Though down 6% year-to-date, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP -0.57% rose 0.6%. Investors again bid up prices of oil producers including Total and BP /zigman2/quotes/202286639/delayed UK:BP +1.26% , continuing a streak in which the Stoxx oil and gas sector /zigman2/quotes/210599627/delayed XX:SXEP +0.29% has jumped 31% over the last month.
The German DAX /zigman2/quotes/210597999/delayed DX:DAX -0.61% , French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 -0.44% , and U.K. FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX -0.10% each registered gains.
Futures on the Dow Jones Industrial Average /zigman2/quotes/210407078/delayed YM00 -0.02% rose 297 points, after a 328-point gain for the blue chips on Monday. Futures on the Russell 2000 /zigman2/quotes/210301297/delayed RTY00 -0.14% outperformed those of the Nasdaq-100 /zigman2/quotes/210219788/delayed NQ00 -0.19% , a sign of the preference for hard-hit small- and value stocks over the technology giants that have surged during the pandemic.
“The likely wide availability of a COVID-19 vaccine in the second half of 2021 underpins our expectation of a strong economic recovery next year following early weakness,” said Bénédicte Lowe, cross-asset strategist at BNP Paribas. “At the same time, monetary policy is likely to remain exceptionally accommodative. We expect this, along with an expansionary fiscal stance, to support economic activity.”
Election risk was further reduced as the head of the General Services Administration told the Biden team that the transition can formally begin, a move President Donald Trump endorsed in a tweet. President-elect Joe Biden is expected to formally name Janet Yellen , the former Federal Reserve chair who presided over an era of low interest rates and stock-market gains, as his Treasury secretary nominee.
Germany’s closely watched Ifo index fell to 90.7 points in November, compared with a downwardly revised 92.5 points in October, though it marginally beat economist expectations.
A sign of the optimism in markets came as catering company Compass Group /zigman2/quotes/200043088/delayed UK:CPG -0.13% rose 6%, after reporting a 78% drop in fiscal year ending Sept. 30 adjusted earnings per share, and didn’t pay a final dividend. Rival Sodexo /zigman2/quotes/206443022/delayed FR:SW -0.98% also advanced.
Pets at Home /zigman2/quotes/200736034/delayed UK:PETS -0.78% shares fell 3% after the pet supplies seller reported a 5% decline in underlying pretax profits for the first half. The stock is still up 95% over the last 12 months.
Entra /zigman2/quotes/202374714/delayed NO:ENTRA 0.00% shares jumped 16% as Sweden’s SBB /zigman2/quotes/203804639/delayed SE:SBB.B -1.49% said it would pay a 15% premium to Monday’s closing price for the Norwegian real estate company that’s partly held by the Norwegian government.