By Shriya Ramakrishnan and Shreyashi Sanyal
(Reuters) - The S&P 500 and the Dow reversed course to rise on Tuesday, led by drugmaker Johnson & Johnson (NYSE:JNJ) following encouraging news on its COVID-19 vaccine, while the Nasdaq hit a record high.
Johnson & Johnson gained 1.9% after the company said it could obtain late-stage trial results of a single-dose COVID-19 vaccine it is developing, earlier than expected.
Pfizer Inc (NYSE:PFE) also rose 3.2% as it cleared the next hurdle in the race to get its COVID-19 vaccine approved for emergency use, after the U.S. health regulator released documents raising no new safety or efficacy issues.
Wall Street's main indexes have traded in a tight range for most of the session so far, as investors awaited more stimulus in the face of surging COVID-19 cases and strict restrictions in California.
"When you are in a market where there is so much near-term negative news because of the virus, but so much future positive news because of the vaccine ... you do get into this tug of war," said Rick Meckler, a partner at Cherry Lane Investments in New Jersey.
"We are at that equilibrium point where there are as many optimists as pessimists about where the market is headed in 2021"
Investors are closely watching whether policymakers will be able to clinch an agreement on a long-awaited coronavirus relief bill and a $1.4 trillion spending bill, with Friday eyed as a deadline to avoid a government shutdown.
The U.S. Congress will vote this week on a one-week stopgap funding bill to provide more time for lawmakers to reach a deal on both spending and pandemic relief.
Positive developments related to the COVID-19 vaccine have in the recent weeks helped investors look past the surge in infections and raise bets on a steady economic recovery next year.
Analysts now expect investor attention to gradually shift from vaccine approvals to their global distribution.
"I don't know if investors are recognizing how long the process is going to take, but the market tends to look out a little more than the very near term. Right now it is predicting that there will be a good distribution system in place some time by the middle of next year," Meckler said.
At 12:21 p.m. ET the Dow Jones Industrial Average was up 88.62 points, or 0.29%, at 30,158.41, the S&P 500 was up 5.21 points, or 0.14%, at 3,697.17 and the Nasdaq Composite was up 5.85 points, or 0.05%, at 12,525.79.
Boeing (NYSE:BA) Co slipped 0.6% after company data showed the planemaker lost another 63 orders for its newly ungrounded 737 MAX jet in November.
Tesla (NASDAQ:TSLA) Inc fell 1.9% after the electric-car maker unveiled a $5 billion capital raise, its second such move in three months.
Drug developer Moderna (NASDAQ:MRNA) Inc climbed 4.2%, after Switzerland increased its confirmed orders for its COVID-19 vaccine doses to 7.5 million from 4.5 million.
Energy shares recovered some of the previous session's losses, even as crude prices remained under pressure.
Advancing issues outnumbered decliners for a 1.66-to-1 ratio on the NYSE and a 1.24-to-1 ratio on the Nasdaq.