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Stocks Edge Higher on Vaccine Optimism

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U.S. stocks edged higher Wednesday, lifted by gains among industrial and financial stocks.

The Dow Jones Industrial Average rose 139 points, or 0.5%, to 29921. The S&P 500 added 0.3% and the Nasdaq Composite advanced 0.1%. The Dow industrials index was within 100 points of its record high.

Stocks have generally risen over the past month, buoyed by optimism that scientists are getting closer to producing and distributing coronavirus vaccines effective enough to curtail infection levels. Drugmaker
Pfizer
said Wednesday that final results from its joint clinical trial with BioNTech showed its coronavirus inoculation was 95% effective.

A vaccine would improve the outlook among business-owners and consumers by signaling that the economy will return to pre-Covid levels, analysts said.

“Given the nature of this crisis, the only way to get out of this cycle of first wave, second wave, third wave [of infections] is to start circulating a vaccine, and that’s going to begin relatively shortly,” said James McCormick, a strategist at NatWest Markets. “If you can convince the consumer to both re-engage in the economy, and also that they’ll have a job in the next six months, that unleashes a major sector of the economy.”

Shares of banks, manufacturers and other economically sensitive companies helped lead stocks higher Wednesday.

Boeing
jumped 2.1% after the U.S. cleared the plane maker’s 737 MAX for passenger flights, helping to resolve the plane maker’s biggest pre-pandemic crisis.

Financial stocks ticked higher alongside long-term bond yields, with
Goldman Sachs
and
JPMorgan
adding more than 1% apiece. Banks generally benefit from rising bond yields, since they help boost their lending profitability.

Target’s shares rose 4.6% after the retailer said sales rose steadily in its most recent quarter as demand for household goods and home-office supplies continued to grow during the pandemic.

Meanwhile, Pfizer shares rose 2% around midday. The company said it it plans to seek authorization for its vaccine within days.

After markets close,
Nvidia
and
L Brands
will disclose their quarterly earnings, giving investors fresh insights into the health of American businesses.

In broader markets, a litany of concerns including new restrictions on social and business activity, and the halting pace of economic recovery, are weighing on overall sentiment. Hopes for a large fiscal stimulus package are also ebbing, investors said.

Federal Reserve Chairman Jerome Powell on Tuesday cautioned that the economy faces significant challenges and uncertainty because of the increased spread of the coronavirus. He also said it was too soon to say how a potential vaccine would change the outlook, with the possibility of widespread vaccination still many months away.

The number of newly reported coronavirus cases rose again on Tuesday, prompting states to implement new restrictions.

The number of newly reported coronavirus cases rose again on Tuesday, prompting states to implement new restrictions.

Photo: Keith Birmingham/Zuma Press

The number of newly reported Covid-19 cases rose on Tuesday, and hospitalizations hit another record in the U.S. With cases on the rise, more states are implementing new restrictions on people’s activity. Ohio imposed on Tuesday a statewide curfew, requiring residents to stay at home from 10 p.m. to 5 a.m.

Fresh data Wednesday showed that U.S. housing starts for October rose almost 5% to 1.53 million, exceeding the consensus estimates of 2.5% growth. The American housing market has been one of the few bright spots in the economy this year.

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Overseas, the pan-continental Stoxx Europe 600 ticked up 0.4%.

Most major Asian equity benchmarks ended the day higher. Japan’s Nikkei 225 index dropped 1.1% by the close of trading after local authorities said there had been a jump in coronavirus cases.

Write to Mischa Frankl-Duval at Mischa.Frankl-Duval@wsj.com and Akane Otani at akane.otani@wsj.com

A Global Asset Management Seoul Korea Magazine

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