Stocks climb, led by Nasdaq, as rotation runs out of steam despite prospect of coronavirus vaccine

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U.S. stocks were higher at noon on Wednesday, as tech stocks dominated cyclical stocks, with investors weighing up the makeup of their portfolios against the possibility of effective COVID-19 vaccines and cures.

Le Dow Jones Industrial Average DJIA,
+ 0,21%
swept early losses to trade 79 points, or 0.3%, higher near 29,501. The S&P 500 SPX Index,
+ 0,81%
advanced 28 points to 3,573, a gain of 0.8%. The Nasdaq COMP,
+ 1,83%
The composite index jumped 182 points, or 1.6%, to trade near 11,736.

On Tuesday, the Dow Jones rose 262.95 points, or 0.9%, to end at 29,420.92, near its previous closing high of 29,551.42 set in mid-February. The S&P 500 fell 4.97 points, or 0.1%, to end at 3,545.53, while the Nasdaq Composite slipped 159.93 points, or 1.4%, to close at 11,553.86 . The Russell 2000 RUT Small Cap Index,
-0,31%
increased by 1.8%.

What drives the market?

This week’s promise of a viable vaccine candidate for COVID-19 has propelled the Dow to near all-time highs and prompted a rotation of large-cap and tech-related stocks, more likely to thrive during lockdowns, at actions that have been most vulnerable to the social distancing measures implemented to slow the spread of the coronavirus.

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This rally and the beginnings of a stock market rotation were triggered after Pfizer
PFE,
-0,93%
and BioNTech
BNTX,
-2,47%
announced Monday that their experimental vaccine has shown 90% efficacy in a phase 3 or advanced study.

Pharmaceutical partners on Wednesday announced an agreement to deliver a 200 million dose supply of its candidate vaccine to the European Union, marking the largest potential vaccine order to date.

Monday also, Eli Lilly & Co. is LLY,
-0,96%
COVID-19 antibody treatment has been approved for emergency use by the United States Food and Drug Administration.

Meanwhile, the markets have greater clarity on the results of the U.S. presidential election, which is expected to have been won by former Vice President Joe Biden over incumbent President Donald Trump, even as the challenges of counting the votes continue.

“I’m more optimistic,” said Don Calcagni, chief investment officer at Mercer Advisors. “The market is looking for three things. First, a peaceful transition of power. It seems that, despite the theatrical aspects, it seems that the electoral system in this country is very robust and works well. Number two, he’s looking to get past COVID. Pfizer’s announcement was a big step in this direction. And the market is also looking for a new relief package. It seems that both parties agree to do this. ”

Goldman Sachs strategists, led by David Kostin, see the vaccine as a bigger development for the economy and markets than the forward-looking policies of a Biden presidency. “The divisive US presidential campaign was actually the backdrop for the main event: a public health crisis that has tragically claimed 240,000 lives in the United States since it began. However, in less than a year, a vaccine was discovered, ”they wrote.

Goldman raised its year-end price target on the S&P 500 Index to 3,700 from 3,600. The bank also expects 4,300 by the end of 2021 and 4,600 by the end of 2022.

True, the pandemic has now infected more people and has passed its previous peak in the spring. The global tally of confirmed COVID-19 cases rose to 51.5 million on Wednesday, according to data aggregated by Johns Hopkins University, while the death toll rose to 1.3 million.

The United States has the highest number of cases in the world with 10.3 million and the highest number of deaths with 239,695, or about a fifth of the global totals. The United States counted 139,855 more cases on Tuesday and at least 1,448 people have died, according to a New York Times tracker.

With the acceleration of the spread, some strategists fear that the enthusiasm to buy stocks at the beginning of the week will fade.

“The optimism surrounding the potential Covid-19 vaccine still lifts the stock markets, but bullish sentiment has cooled,” David Madden, market analyst at CMC Markets, wrote in a note.

“Massive gains have been racked up over the past two sessions, so it’s hardly surprising that the buying frenzy has died down. The values ​​of commodities, banks, supermarkets and leisure are up on this day, but the gains are much more modest than what was seen earlier in the week, ”he wrote.

Mercer’s Calcagni believes any sign of a turn to value stocks is premature. “We’ve all been planning this rotation for a long time,” he said in an interview with MarketWatch. But there are still some obstacles to overcome, he said, including the second round of elections for Georgian senators in early January, which will determine whether Washington remains politically divided, a more favorable outcome for investors, he said.

No US economic report is available Wednesday due to the government holiday.

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What stocks are targeted?
  • Canopy Growth Corp. CGC,
    + 1,64%
    said on Wednesday that it released its Martha Stewart CBD Wellness Gummies sampler in time for the holiday season. Shares rose 0.6%.
      </li> <li> 
    
       Actions de <strong>Palo Alto Networks Inc.</strong> 
        PANW,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/207599953/composite" class="positive">+ 3,54%</bg-quote>
       étaient en hausse de 2,3% mercredi après l'annonce d'une acquisition. 
    
    
      </li> <li> 
      <strong>  Ascenseur</strong> 
        ASCENSEUR,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/208999293/composite" class="positive">+ 3,21%</bg-quote>
       mardi, a enregistré une perte de 459,5 millions de dollars au troisième trimestre, ou 1,46 dollar par action, sur un chiffre d'affaires de 499,7 millions de dollars, contre 955,6 millions de dollars il y a un an.  Les actions ont augmenté de 2,9%.
    
    
      </li> <li> 
       <strong>ConocoPhillips</strong>
        FLIC,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/207605056/composite" class="negative">-0,49%</bg-quote>
       a déclaré mercredi qu'il avait fait une découverte de gaz significative près de la Norvège, augmentant son stock de 0,7% en fin de matinée. 
    
    
      </li> <li> 
    
       Actions de <strong>Alibaba Group Holding Ltd.</strong>
        BABA,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/201948298/composite" class="positive">+ 1,06%</bg-quote>
       a augmenté de 0,6% mercredi, même après que les régulateurs du marché chinois ont rédigé des lignes directrices anti-monopole visant le groupe. 
    
    
      </li> </ul> <h6>Que font les autres marchés?</h6> <p>L'indice paneuropéen Stoxx 600 Europe SXXP,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210599654/delayed" class="positive">+ 1,07%</bg-quote>
       a bondi de 1,1%, tandis que le FTSE 100 UKX de Londres,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210598409/delayed" class="positive">+ 1,35%</bg-quote>
       a augmenté de 1,3%, alors même que la directrice de la Banque centrale européenne, Christine Lagarde, a exhorté à la patience sur les perspectives de vaccins. </p> <p>Les contrats à terme pétroliers s'inspirent du rallye inspiré des vaccins, avec l'indice de référence américain CL.1,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/211629951/delayed" class="positive">+ 1,95%</bg-quote>
       en hausse de 1,7%, ou 0,73 $, à 42,08 $ le baril.  Or GCZ20,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210039572/delayed" class="negative">-0,87%</bg-quote>
       a glissé de 0,8% à 1 861,60 $ l'once alors que les rendements obligataires se sont accélérés.</p> <p>L'indice ICE US Dollar, DXY,
        <bg-quote field="percentchange" format="0,000.00%" channel="/zigman2/quotes/210598269/delayed" class="positive">+ 0,38%</bg-quote>
       une mesure de la monnaie par rapport à un panier de six grands rivaux, était de 0,4% plus élevé.</p> <p> <strong><em>MarketWatch a lancé ETF Wrap, une newsletter hebdomadaire qui vous apporte tout ce que vous devez savoir sur le secteur négocié en bourse: les débuts de nouveaux fonds, comment utiliser les ETF pour exprimer une idée d'investissement, les réglementations et les changements du secteur, les entrées et les performances, etc.  Inscrivez-vous à ce lien pour le recevoir directement dans votre boîte de réception tous les jeudis.</em> </strong> 
    
    
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