Nasdaq rebounds as vaccine news raises hopes, focus returns to tech stocks

The tech index climbed 1.6%, the most among major S&P sectors, followed by the consumer discretionary index | Photo: Reuters
Wall Street's main indexes advanced on Wednesday as signs of a working Covid-19 vaccine raised hopes of a faster-than-expected economic rebound, with technology stocks bouncing back from steep losses this week.

The tech-skewed Nasdaq advanced 1.5%, while technology mega-caps including Netflix Inc, Inc and Facebook Inc, the so-called stay-at-home winners, also gained between 1% and 2%.

The tech index climbed 1.6%, the most among major S&P sectors, followed by the consumer discretionary index.

Encouraging data from a late-stage vaccine earlier this week prompted a rotation away from technology names, and lifted demand for stocks sensitive to economic growth, as well as those that have lagged this year such as energy, financials and industrials.

The top US infectious disease specialist urged caution until a vaccine can be approved and distributed, as California and several states across the US Midwest tightened restrictions.

"It will be a long time before we can get a sizable part of the population inoculated with the vaccine ... but it does speak to a slightly brighter future," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Markets, which have also got a boost after Democrat Joe Biden was projected the winner of the US election, have broadly shrugged off legal challenges from President Donald Trump as they have not produced evidence of problems with votes.

Meanwhile, the Democratic Party retained control of the US House of Representatives with a lower majority, the Associated Press reported, but investors are more focused on Senate races in January that could determine if major Democratic priorities like a large coronavirus aid bill would be passed.

At 09:52 a.m. ET the Dow Jones Industrial Average rose 81.21 points or 0.28% to 29,502.13, the S&P 500 gained 23.46 points or 0.66% to 3,568.99 and the Nasdaq Composite gained 171.47 points or 1.48% to 11,725.33.

S&P's growth stock index, outperformed the economically sensitive value index in a reversal of Tuesday's trend.

Lyft Inc jumped 6% after the ride-hailing app said it was working on a new service to take a slice of the burgeoning food-delivery market, as it works to make up for a drop in quarterly revenue.

The Philadelphia SE chip index rose about 3% after suffering sharp losses a day earlier.

Advancing issues nearly matched decliners on the NYSE, and on the Nasdaq, a 1.2-to-1 ratio favored advancers.

The S&P 500 posted five new 52-week highs and no new low, while the Nasdaq Composite recorded 52 new highs and 1 new low.


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