By Yasin Ebrahim
Investing.com – The S&P 500 cut intraday losses to close higher Wednesday, underpinned by positive vaccine news and a fresh record high in Apple as the iPhone maker neared an unprecedented $3 trillion valuation.
The S&P 500 rose 0.3% to close above 4,700 for the first since Nov. 24. The Dow Jones Industrial Average rose 0.10%, or 35 points, the Nasdaq climbed 0.6%.
Underlying investor sentiment on stocks continued to be supported by further positive news highlighting the efficiency of vaccines in protecting against the Omicron virus.
"I think [the recent rebound] is very much tied in with the better news on COVID-19 vaccines," Mark Heppenstall, chief investment officer at Penn Mutual Asset Management, told Investing.com in an interview on Wednesday. "It's hard to dismiss the [positive vaccine] news because when the omicron news first appeared that really seemed to spook markets."
Pfizer and BioNTech said Wednesday preliminary results showed their Covid-19 vaccine neutralizes the virus' Omicron variant after three doses. Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) ended lower.
Pfizer also said it that would submit full results of its Covid-19 pill, Paxlovid, to the U.S. Food and Drug Administration in the coming days, CNBC reported, citing the company's Chief Executive Officer Albert Bourla.
Consumer staples, a defensive corner of the market, was the biggest decliner, paced by a decline in the Kroger (NYSE:KR), Brown Forman, and Kraft Heinz.
Kraft Heinz (NASDAQ:KHC) fell more than 3% after Guggenheim downgraded the stock to neutral from buy, citing margins pressures ahead.
"Kraft Heinz portfolio's lack of pricing power is getting more apparent as weeks pass, which, in our view, has a significant consequence in near term top and bottom line growth," Guggenheim said.
Brown Forman (NYSE:BFb) reported third-quarter results that fell short of expectations on both the top and bottom lines, sending its shares more than 2%.
Renewed optimism on the recovery, pushed cyclical stocks including financials and energy higher.
Financials, mostly banks, gave up some their gains from a day earlier despite rising Treasury yields, an ally of bank stocks.
State Street (NYSE:STT), Zions Bancorporation (NASDAQ:ZION), Wells Fargo (NYSE:WFC) led financials to the downside.
The United States 10-Year yield rose above 1.5% for the first time in almost a week. But the recent move higher in the 10-year yield comes after a continued flattening in the yield curve, which signals that the Federal Reserve is unlikely to move aggressively on rate hikes to avoid a significant slowdown in the economy.
"The clear signal from the bond market that we've seen recently is that there's going to be a limit as to how quickly and how high the Fed can go with regards to rate hikes," Heppenstall added. "In a global negative interest rate world, if U.S. monetary policy gets too far out of line with other central banks that haven't started to move on the rate front that won't be good for U.S. economic growth."
Strength in communication services, however, supported the broader market as social media stocks including Twitter (NYSE:TWTR) and Meta Platforms (NASDAQ:FB) advanced.
Twitter's new chief executive talked up the prospect of improving the speed of execution at the company to support plans to double revenue by 2023.
Apple (NASDAQ:AAPL), meanwhile, closed at record high for the second day in a row that took the giants' market cap to $2.87 trillion to close in on an unprecedented $3 trillion valuation.
Roku (NASDAQ:ROKU), meanwhile, notched an agreement with Google to keep YouTube and YouTube TV on its platform, sending its shares more than 18% higher.