Stocks rise on vaccine hopes; S&P 500 regains ground

Markets worldwide rallied on rising hopes for a COVID-19 vaccine Wednesday, and the Standard & Poor’s 500 index climbed back to where it was a few days after it set its record early this year.

Investors see a vaccine as the best way for the economy and human life to get back to normal, and researchers said late Tuesday that one developed by the National Institutes of Health and Moderna revved up people’s immune systems in early testing, as hoped. The S&P 500 rose 0.9% to pull within 4.7% of its alltime high set in February.

The Dow Jones industrial average climbed 227.51 points, or 0.9%, to 26,870.10, and the Nasdaq composite gained 61.92, or 0.6%, to 10,550.49. During the morning, the S&P 500 touched its highest level since Feb. 25, and it ended the day at 3,226.56, up 29.04.

Several things helped lift the market, including stronger-than-expected reports on the economy and on corporate profits from Goldman Sachs and others. But the vaccine hopes were at the center of the rise, which meant the market’s leader board was dominated by companies that would benefit most from a return to normal life. They included cruise-ship operators, airlines, retailers and hotel chains.

Stocks of smaller companies also leaped much more than the rest of the market, an indication of rising expectations for the economy. The Russell 2000 index of smallcap stocks jumped 3.5%, a turnaround from earlier months when big, tech-oriented companies were carrying the market.

Winners of the stay-athome economy, meanwhile, lagged behind. Clorox, Netflix and Amazon all fell.

Wednesday’s lift for markets, though, came only after another day of choppy trading. The S&P 500 shot to a quick 1.3% gain shortly after trading began, only to give up nearly all of it before swinging a couple more times.

The S&P 500 is almost exactly where it was June 8. Often, it has swung sharply within a single day as hopes for a budding economic recovery collide with increases in COVID-19 cases.

On Wednesday, as Wall Street was losing its stride, Florida announced another daily death toll of more than 100 and Oklahoma’s governor said he tested positive for COVID-19.

Worries also remain high that the stock market has gone overboard in its rally, but markets nevertheless climbed Wednesday.

The nation’s industrial production improved more in June than economists expected. So did manufacturing in New York state earlier this month.

Goldman Sachs rose 1.4% after it reported much stronger results for the latest quarter than analysts expected. Financial stocks in general did well, with those in the S&P 500 up 1.9%.

Royal Caribbean Cruises surged 21.2% to lead a group of stocks that stand to gain if consumers get back to life as it was before the pandemic. American Airlines rose 16.2%, Gap jumped 12.7%, Live Nation Entertainment rose 11.7% and Hilton Worldwide added 10.1%.

The yield on the 10-year Treasury rose to 0.63% from 0.61% late Tuesday.

In Europe, Germany’s DAX returned 1.8%, while the CAC 40 in Paris advanced 2%. Britain’s FTSE 100 rose 1.8%.