© Reuters. FILE PHOTO: The New York Stock Exchange (NYSE) is seen silhouetted in New York's financial district
By Sagarika Jaisinghani and Shivani Kumaresan
(Reuters) – The blue-chip Dow surged in troubled trading Monday as hopes for a COVID-19 vaccine fueled demand for economically sensitive stocks like energy and industrials amid a sell-off by tech heavyweights Den and Nasdaq burdened.
Six of the top 11 S&P indices traded higher in the early afternoon, with Industry and Energy gaining 1.2% and 4.6%, respectively, as the data showed the monthly business was doing the fastest pace in more than five Years increased.
Communication services and information technology indices were among the biggest declines as investors stepped out of the tech mega-caps considered safe bets after a coronavirus-induced crash earlier this year.
"The vaccine is the driver of general optimism," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"(But) you'll be going back and forth a bit as this is a holiday week and we're usually going to get a lot more volatility."
Evidence of high rates of effectiveness in experimental COVID-19 vaccines had taken the S&P 500 to a record high this month, breaking the blue-chip Dow nearly 30,000 points for the first time.
AstraZeneca (NASDAQ 🙂 Plc announced Monday that its vaccine could be about 90% effective as the youngest major drug maker, while in the US, health regulatory agencies are expected to approve distribution of the vaccine it makes in mid-December Pfizer Inc. (NYSE 🙂
The CBOE volatility index, known as Wall Street's fear gauge, fell, hovering near the levels last seen in August.
"November was the month we finally became convinced that there was light at the end of the tunnel (and) today is another of those days," said Art Hogan, chief market strategist at National Securities in New York.
At the start of a trading week, which was shortened by the harvest festival on November 26, it rose by 0.64% to 29,450.81. The S&P 500 gained 0.18% while the lost 0.05%.
Sentiment has been slowed by new lockdowns to curb a surge in coronavirus infections, with Nevada on Sunday becoming the youngest state to tighten restrictions on casinos, restaurants and bars, and impose a broader mandate on face coverings over the next three weeks.
Meanwhile, hopes for further monetary stimulus have been dampened after Treasury Secretary Steven Mnuchin suspended some of the Federal Reserve's pandemic emergency loan programs last week.
Tesla (NASDAQ 🙂 Inc was up 5.7% and approached $ 500 billion in market cap before joining the S&P 500 next month.
Progressive issues outperformed declines on the NYSE by 2.90 to 1 and on the Nasdaq by 1.95 to 1.
The S&P index made 26 new 52-week highs and no new low, while the Nasdaq made 146 new highs and eight new lows.
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