By Yasin Ebrahim
Investing.com – The Dow eased from session highs into the close on Tuesday, amid diminishing investor optimism that the gradual lifting of Covid-19 restrictions will spark a quicker economic recovery, though a climb in healthcare and technology stocks kept a lid on the downside.
The Dow Jones Industrial Average gained 0.56%, the S&P 500 rose 0.9%, while the Nasdaq Composite added 1.13%.
The broader market eased from session highs as Federal Reserve Vice Chairman Richard Clarida suggested that the economy may need more stimulus served as a reminder that the underlying economy remains in trouble, hurting investor sentiment. Clarida also said unemployment could hit levels not seen since the 1940s.
Healthcare stocks led the broader market higher as investors digested positive news on the drugmakers' efforts to produce a coronavirus vaccine.
Pfizer (NYSE:PFE) ended 2.3% up after announcing it had begun testing a potential coronavirus vaccine in the United States.
Regeneron Pharmaceuticals (NASDAQ:REGN) rallied 5.8% after reporting earnings that topped consensus estimates. The healthcare company also said it was on track to begin human trials of its experimental coronavirus antibody cocktail in June.
Technology built on its positive start to the week as chip stocks and FAANG names, excluding Netflix (NASDAQ:NFLX), ending in positive territory.
Apple (NASDAQ:AAPL) confirmed it will host its annual worldwide developers conference virtually, beginning June 22.
Energy, meanwhile, was supported by a rally in oil prices as major oil producers cut supply, while the easing of Covid-19 lockdown measures that had hampered economic activity for several weeks boosted hopes of a recovery in oil demand.
Goldman Sachs (NYSE:GS) raised its estimate for WTI Crude prices in 2021 to $51.38 per barrel from $48.50 on expectations that oil output cuts and the reopening of economies would ease the glut in supply.
“Oil production has started to decline quickly from a combination of scaleback in activity, shut-ins and core-OPEC/Russia production cuts,” Goldman Sachs Equity Research said, according to Reuters.
"Demand is also beginning to recover from a low base, led by a restarting Chinese economy and inflecting transportation demand in developed market economies,” Goldman added.
With the economy set to reopen, the White House is reportedly discussing scrapping the White House coronavirus task force, Vice President Mike Pence told reporters.
“We’re having conversations about that,” Pence says in a briefing the task force held for reporters, confirming an earlier report by the New York Times.