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The S&P 500 climbs greater than 1% to a file near the sturdy week as the big shares proceed to rotate

US stocks rose on Friday as investors continued to bet on stocks that would benefit from a potentially potent vaccine and economic rebound over the next year.

The S&P 500 gained 1.4% to 3,585.15 and posted a record high. The Dow Jones Industrial Average rose 399.64 points, or 1.4%, to close at 29,479.81. The Nasdaq Composite was up 1% to 11,829.29. The Russell 2000, which tracks small-cap stocks, rose more than 2% to an intraday record, hitting its first all-time high since August 2018.

The shares of cruise company Carnival rose more than 7%. United Airlines and Boeing both gained more than 5%. Disney closed 2.1% higher on better-than-expected quarterly numbers. At the sector level, Energy and Industry rose 3.8% and 2.2%, respectively, to lead the S&P 500 higher. Financials rose more than 1%.

Both the Dow and S&P 500 saw strong weekly gains, confirmed by news from Pfizer on Monday that the vaccine it is developing with BioNTech was more than 90% effective in one study. This resulted in a rotation in cyclical stocks that would benefit from an economic comeback over the next year. Investors have dumped tech stocks that have held up during the pandemic.

The Dow rose 4.1% over the week and the S&P 500 closed 2.16% higher over the period. Tech-heavy Nasdaq lost 0.6% this week, posting its third weekly drop in four weeks.

"This week's positive vaccine news is a cornerstone in our view as it allows the market to see the recent surge in COVID-19 cases leading up to the impending end of the pandemic and wider economy reopening," wrote Marko Kolanovic. JPMorgan's head of macro-quantitative strategy and derivatives strategy was one of the first to take turns in March.

Ahead of Friday's rally, midweek rotation was halted as traders feared a rising number of coronavirus cases could seriously affect the economy before a vaccine gets here.

A CNBC analysis of the data compiled by Johns Hopkins University found that the average daily new cases in at least 47 states had increased by at least 5% over the past week. Hospital stays are increasing in at least 46 states. More than 150,000 cases were confirmed in the United States on Thursday alone.

The recurrence of coronavirus cases has also resulted in some parts of the country taking stricter social distancing measures. In Chicago, Mayor Lori Lightfoot asked residents to cancel their Thanksgiving plans and stay indoors if cases arise in the city. In New York state, Governor Andrew Cuomo said new curfews on bars, restaurants and gyms will come into effect on Friday.

Phillip Colmar, partner at MRB Partners, wrote in a note that the global economic recovery "will continue, but the V-shaped part is over and we have already moved to a slower pace of two steps forward and one step back."

Federal Reserve Chairman Jerome Powell said Thursday the country's economic outlook remains uncertain. "With the virus spreading, the next few months could be challenging," he said.

However, investors managed to look past the rising coronavirus numbers as Monday's Pfizer-BioNTech announcement "continues to resonate," said Adam Crisafulli, founder of Vital Knowledge.

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