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Dow Climbs on Renewed Stimulus Hopes, Vaccine News

Stock MarketsDec 01, 2020 02:57PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com - The Dow rebounded Tuesday following a soft start to the week as renewed hopes on fiscal stimulus and positive vaccine news lifted investor sentiment and eased worries about Covid-19 infections across the U.S.

The Dow Jones Industrial Average climbed 0.91%, or 268 points. The S&P 500 was 1.34%, while the Nasdaq Composite rose 1.39%.

Pharmaceutical giants Pfizer and Moderna (NASDAQ:MRNA) moved closer to receiving EU approval for their respective Covid-19 vaccines after the European Medicines Agency said it could complete its assessment of both companies' vaccines by Dec. 29 and Jan. 12 respectively.

Pfizer (NYSE:PFE) rose 3% and its development partner BioNTech (NASDAQ:BNTX) fell 10%, while Moderna fell 12%.

The backdrop of progress on the vaccine front helped eased some investor fears that infections could continue to ramp in the weeks ahead as more people gather over the holidays.

U.S. coronavirus cases in America have doubled in a month to a record four million.

The impact of the rising Covid-19 cases appears to have triggered a sense of urgency among lawmakers to ramp-up efforts on a stimulus relief program that many argue is needed to support the economy until a widespread vaccine rollout.

House Speaker Nancy Pelosi and U.S. Treasury Secretary Steven Mnuchin are set to reignite talks over a new stimulus deal as lawmakers on Capitol Hill reportedly proposed a $908 billion coronavirus relief bill that includes aid for various parts of the economy including small businesses and unemployed Americans.

The positive news on vaccines prompted optimism from Federal Reserve Chairman Jerome Powell who touted upside risks in the medium-term for the economy, though continued to reiterate a long road to recovery. 

In the medium term, there is upside risk, though there in the near term, there are a lot of small businesses in danger of going out of business this winter," Powell said. "We do have a long way to go on recovery."

Value stocks – those linked with the performance of the economy, clawed back some of their losses from a day earlier, with financials among the biggest gainers, up nearly 2%.

Energy, however, lagged the move higher in value stocks after major producers delayed a decision on whether to ease production output from January until later this week.

In tech, Zoom Video Communications (NASDAQ:ZM) was among the biggest decliners of the session, down 15%, after the video conference software maker reported better-than-expected results and guidance, but warned of increased churn in the final quarter of the year that will slow revenue growth.

"Given the elevated expectations heading into the print, and the fear around what a post-COVID growth rate may look like for the company, we would expect near-term share weakness to persist," RBC said after cutting its price target on Zoom to $550 from $600.

Among the Fab 5 stocks, Facebook (NASDAQ:FB) surged nearly 4%, while Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) traded higher.

In other news, Kohl's (NYSE:KSS) jumped 14% after detailing plans to team up with Sephora to open more than 800 mini-shops inside its stores by 2023.

Dow Climbs on Renewed Stimulus Hopes, Vaccine News
 

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Comments (10)
michael engel
michael engel Dec 01, 2020 4:30PM ET
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Deir Yassin, the DOW is a shooting star, closed < PFE Sept 9 high. If the DOW will close the gap, PnF count is a massacre.
Jo Pa
Jo Pa Dec 01, 2020 4:11PM ET
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Stimulus is bearish. You have to tax the economy $2.5B to pay for a $2B stimulus plus bureaucracy to manage it. Net loss.
Alexandre Marquis
Alexandre Marquis Dec 01, 2020 4:11PM ET
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Hehe it doesn't work like that.
john bisazza
john bisazza Dec 01, 2020 4:11PM ET
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stat came out a few days ago saying 1 and 7 people are going hungry without money to buy much food, small businesses on the brink of collapse, and you're saying a stimulus wouldn't be a gain, for God's sake people need food.
Robert Cox
Robert Cox Dec 01, 2020 4:11PM ET
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Yes, but hungry people and businesses about to shutter don't buy stocks. Inevitably, stimulus will just help big businesses pay out more in executive compensation. Sadly, it seems the markets think such news to be bullish.
Elvis Durant
Elvis Durant Dec 01, 2020 3:07PM ET
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Come on Yasin Ebrahim. nice try with this fake news article.....Your pal Mnuchin said few days ago NO more PPP, and no stimulus......Try again!
James Bell
James Bell Dec 01, 2020 3:05PM ET
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the vaccine will fix the economy. happy days are here again. forget about biden business tax increases (for now). 😵🤣🤯
Robert Alex
Robert Alex Dec 01, 2020 2:35PM ET
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Hope of a stimulus? Does anyone actually think that's going to happen? Trump lost so his interest in a stimulus is gone. Mitch Mcconnel isn't going to let anything sizable pass with Biden in charge.  Let's be real here. But then again, hope hope hope!
Stephen Smith
Stephen Smith Dec 01, 2020 2:35PM ET
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Dow Jones Industrial Average futures traded 40 points higher, or 0.1%. S&P 500 and Nasdaq 100 futures advanced 0.2% and 0.4%, respectively. https://worldabcnews.com/u-s-stock-futures-rise-after-wall-street-wraps-up-historically-strong-month/
Santo Inversionista
Santo Inversionista Dec 01, 2020 2:34PM ET
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If the vaccine and stimulus are not already reflected in the indexes results the real representation of the market goes to only 1% or less of the global population. This results just can't be true.
Jaundiced Eye
Jaundiced Eye Dec 01, 2020 2:15PM ET
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Just the usual: Good News moves the markets higher. And Bad News...is just Good News in disguise.
Mojo Snake
Mojo Snake Dec 01, 2020 1:36PM ET
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Oooh  we got a two pronged HOPE scenario going now.....Buy Buy Buy....  That's hope you can bet on.  Thank god I live on Wall St and not Main St.  It's ghetto down there......
Matt Kay
Matt Kay Dec 01, 2020 1:34PM ET
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Real reason for the climb shown in the picture of the article - aka market manipulators.
SquadW Name
SquadW Dec 01, 2020 1:34PM ET
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its just money movement from bonds which yield 0 or negative % to stocks which yield positive % and are inflation proof, you have no idea of principles of economy
Elvis Durant
Elvis Durant Dec 01, 2020 1:34PM ET
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SquadW Name What ECONOMY??? 🤦🏽‍♂️🤦🏽‍♂️😒😒😒🤣🤣🤣🤣
 
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