The Dow Jones Industrial Average rallied on Tuesday, breaking above 30,000 for the first time as this month’s rally in beaten-down value stocks continued to pick up steam amid positive vaccine news and hope for a strong economic recovery.
The 30-stock Dow advanced 512 points, or 1.7%. At its high of the day, it traded at 30,116.51. Chevron, JPMorgan Chase and Boeing led the way for the Dow, rising more than 3% each.
Meanwhile, the S&P 500 climbed 1.5%, putting it on pace for a record closing high, and the Nasdaq Composite advanced 1%.The small-cap Russell 2000 also hit an all-time high.
Tuesday’s gains put the Dow up more than 13% for the month, which would be its biggest monthly gain since 1987. The S&P 500 and Nasdaq are up 11.2% and 10.1%, respectively, in November. It would be the Nasdaq’s and S&P 500’s best monthly performances since April.
Investors continued to add exposure to beaten-down value names on Tuesday. The iShares Russell 1000 Value ETF (IWD) gained 2.2% and outperformed its growth counterpart, which advanced 0.9%. Value stocks have been on fire this month as a slew of positive coronavirus vaccine data raised expectations for a swift economic recovery.
AstraZeneca said Monday interim analysis showed its vaccine has an average efficacy of 70%. Earlier this month, Pfizer and BioNTech also posted strong vaccine data along with Moderna.
Traders also cheered on Tuesday the increasing political clarity after General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.
President Donald Trump tweeted that he approved of the move, but said he will “keep up the good fight” even as his reelection campaign has so far failed to win any legal victories that would invalidate votes for Biden.
Meanwhile, President-elect Joe Biden will nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Many view Yellen as a market-friendly pick considering that she oversaw a long economic expansion with historically low-interest rates and she’s likely to push for further fiscal stimulus.
“I think this is a strong sign that Biden will be focused on rebuilding the economy vs. pursuing aggressive regulatory policy,” said Ed Mills, Washington policy analyst at Raymond James. “She will be an effective voice of more fiscal support vs. someone who was seen as a partisan … I would say that is a positive development for the market, but more importantly for the economy as a whole.”
Still, investors weighed vaccine news against a resurgence in new coronavirus cases, which prompted some Wall Street firms including Goldman Sachs and JPMorgan to lower their near-term economic outlook.
The U.S. continues to notch record Covid-19 infections, with the national seven-day average of daily new cases hitting 170,855 on Sunday, according to a CNBC analysis of Johns Hopkins University data.
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