Canadian and U.S. stocks ended higher on Wednesday, following promising early data for a potential COVID-19 vaccine and a strong quarterly report from Goldman Sachs. It was the highest close for the TSX since March.
Moderna Inc rallied after a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies.
Travel-related stocks Carnival Corp, Royal Caribbean Cruises Ltd, Marriott International and Wynn Resorts surged, as did the S&P 1500 airlines index. On the TSX, Air Canada gained 13.82% and Chorus Aviation 13.37%.
The S&P 500 beat the technology-heavy Nasdaq Composite for a fourth straight session, a feat scored only twice since Wall Street launched its massive recovery last March.
Gains for the Nasdaq were capped by online retail giant Amazon.com Inc, video streaming platform Netflix Inc and Microsoft Corp, which slipped after surging to record highs recently.
“The Moderna news woke everybody up again that this is not going to last forever, and there is light at the end of the tunnel. That is why you are seeing such a strong move today into those economically sensitive stocks,” said Tim Ghriskey, Chief Investment Strategist Inverness Counsel in New York.
Adding to investors’ enthusiasm, the Federal Reserve’s Beige Book survey showed U.S. businesses saw an uptick in activity into the beginning of July as states eased restrictions to contain the novel coronavirus pandemic.
A raft of stimulus measures and encouraging economic data have lifted the S&P 500 to about 5% below its record high hit in February.
However, the United States has failed to control the coronavirus and there is a high level of uncertainty over how much the pandemic will affect the economy, Philadelphia Federal Reserve Bank President Patrick Harker said, as a number of U.S. sunbelt states reported a surge in COVID-19 cases recently.
Unofficially, the Dow Jones Industrial Average rose 228.47 points, or 0.86%, to 26,871.06, the S&P 500 gained 29.1 points, or 0.91%, to 3,226.62 and the Nasdaq Composite added 61.92 points, or 0.59%, to 10,550.49.
Goldman Sachs rose after it said its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.
Morgan Stanley and Bank of America gained ahead of their results on Thursday. The broader banking index also climbed.
In Toronto, the S&P/TSX Composite Index closed up 154.88 points, or 0.97%, at 16,063.33. Most sectors were higher, led by a 3.03% boost in real estate stares. Energy rose 2.11%, financials 1.32%, and telecom 1.41%.
Sleep Country Canada Holding rallied 12.88% on no apparent fresh news, although the stock has had a rough month.
As had been the case earlier this week, tech stocks underperformed in Canada, just like in the U.S. Shopify lost 2.25%.
Reuters, Globe staff
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