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December 9, 2020Dow and S&P 500 open higher, building on Tuesday’s record-setting session
December 9, 2020(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)
* Banks, industrials, travel stocks rise
* Pfizer, J&J extend gains after positive vaccine updates
* Futures: Dow up 0.24%, S&P up 0.12%, Nasdaq down 0.08% (Adds comments, updates prices)
Dec 9 (Reuters) – The S&P 500 was set to open at a record high on Wednesday as hopes for a vaccine-linked economic recovery and more domestic fiscal stimulus sparked demand for economically sensitive stocks such as banks and industrials.
Investors have flocked to U.S. equities and shrugged off weak economic data in recent weeks on signs that a working COVID-19 vaccine would be available before the end of the year.
The U.S. Food and Drug Administration raised no new issues about the safety or efficacy of Pfizer Inc’s candidate on Tuesday, while Johnson & Johnson reported it could obtain late-stage trial results for a single-dose vaccine earlier than expected.
Both drugmakers’ shares gained about 1%.
President-elect Joe Biden has vowed that his administration would vaccinate 100 million Americans during his first 100 days in office, push to reopen schools and strengthen mask mandates.
“The market remains very optimistic that some sort of a stimulus deal would be cut before the end of the year, and that would indicate the economy may not falter or wind up in a double-dip recession,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
U.S. lawmakers continued to negotiate on the long-awaited coronavirus relief package, but provisions on liability protections for businesses and aid to state and local governments have caused divisions between Republicans and Democrats.
The Trump administration proposed a new $916 billion aid package on Tuesday, after congressional Democrats shot down a suggestion for a pared-down plan.
At 8:19 a.m. ET, Dow e-minis were up 72 points, or 0.24%, S&P 500 e-minis were up 4.5 points, or 0.12%, and Nasdaq 100 e-minis were down 9.75 points, or 0.08%.
Major U.S. banks Citigroup and Wells Fargo gained half a percent before the bell, while industrial bellwether Boeing Co climbed 1.1%.
With overall valuations now at extremely high levels, some investors worry stocks could be more vulnerable to any bad news such as unexpected setbacks in the roll-out of vaccines or delays in stimulus.
Travel stocks, which have been battered by the COVID-19 pandemic, also clocked sharp gains. American Airlines Group Inc and United Airlines Holdings Inc jumped 3.9% and 1.5%.
Campbell Soup Co slipped 0.9% even as it reported a 21% surge in sales of soups in the United States alone. (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Shounak Dasgupta)
