Stocks rise to record highs, S&P 500 closes above 3,700 for the first time

Stocks rose to fresh all-time highs on Tuesday as Pfizer started to roll out its coronavirus vaccine in the U.K., lifting hope of the economy recovering in the near future.

The Dow Jones Industrial Average gained 104.09 points, or 0.4%, to close at 30,173.88. The 30-stock Dow hit an intraday record of 30,246.22. The S&P 500 advanced 0.3% to 3,702.25. It marks the S&P 500’s first close above 3,700. The Nasdaq Composite climbed 0.5% to 12,582.77. All three of the market benchmarks were lower to start the session.

Dow Inc., Johnson & Johnson and 3M were among the best-performing Dow stocks, rising more than 1% each. Energy led the S&P 500 higher, popping more than 1.5%.

Pfizer shares rose 3.2% and reached their highest level in about two years. BioNTech, which developed the vaccine alongside Pfizer, saw its stock rise by 1.9%.

The U.K. ordered enough vaccines for 20 million of its residents to start. In the U.S., the Food and Drug Administration said the vaccine provides some protection after the first dose. The FDA also said it found no safety concerns with the vaccine.

“This is a bit of positive news that can’t be misinterpreted,” said Matt Lloyd, chief investment strategist at Advisors Asset Management. “As a whole, there are reasons to be optimistic.”

The Pfizer-BioNTech vaccine rollout came as traders kept an eye on negotiations for additional fiscal stimulus while the U.S. coronavirus caseload continues to rise.

Stimulus talks continue

Senate Majority Leader Mitch McConnell said he wants to pass a relief bill with neither legal immunity for businesses nor aid for state and local governments, two key and contentious issues along with direct stimulus checks to individuals.

“What I recommend is we set aside liability and set aside state and local, and pass those things that we can agree on knowing full well we’ll be back at this after the 1st of the year” during the transition to President-elect Joe Biden’s administration, McConnell told reporters on Tuesday.

McConnell added, however, that both sides have found consensus in some areas, including Paycheck Protection Program small business loans.

“We’ve been hopeful for a while that a fiscal stimulus deal will get done,” said Tom Martin, senior portfolio manager at GLOBALT. “But there are still deep-seated issues preventing” a deal from happening. Right now, the market is “treading water.”

Republican and Democratic leaders said Monday that Congress is trying to extend government funding for an additional week to try and strike a deal on new Covid-19 aid. The news came after a bipartisan group of senators unveiled a $908 billion stimulus proposal last week.

“News out of DC that fiscal stimulus talks have resumed is a positive development (though until a deal actually passes the President’s desk, this might be all hat, no cattle),” wrote Willie Delwiche, investment strategist at Baird.

Calls for a new aid bill being pushed through before year-end have grown recently as U.S. employment growth continues to slow down and the number of Covid-19 cases keeps rising.

More than 15 million coronavirus cases have been confirmed in the U.S., according to data from Johns Hopkins University. The country’s daily infection rate, as a seven-day average, is also at an all-time high.

This latest spike in Covid-19 cases has led several states and cities to reimpose stricter social-distancing measures. New York Gov. Andrew Cuomo said Monday that New York City could lose indoor dining next week, adding that more severe restrictions would be imposed if hospitals reach a critical point.

“You can’t overwhelm the hospital system,” Cuomo said. “Overwhelming the hospital system means people die on a gurney in a hallway.”

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