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Make 2021 your best financial year yet!

S&P 500, Dow close at all-time highs

Stephen Culp
·2-min read

The S&P 500 and Dow Jones industrial average have notched record closing highs on news of another promising vaccine fanning hopes of eradicating COVID-19 as spiking infections threaten to hobble recovery.

All three major US stock indexes advanced on Monday and with its new closing record, the blue-chip Dow is the last of the three to reclaim levels reached in February, before lockdowns sent the markets into free-fall.

The Russell 2000 also hit an all-time closing high.

Value, cyclical and small cap shares outperformed the broader market.

Moderna Inc said its experimental COVID-19 vaccine was 94.5 per cent effective in preventing infection based on interim late-state data.

It was the second drugmaker in as many weeks, after Pfizer Inc, to announce promising trial data in the development of a vaccine to defeat the pandemic.

Combined, pending further data and regulatory review, the United States could have as many as 60 million emergency doses available this year.

"More vaccine news is driving cyclicals, small caps and value, which would be primed if the economy reopens sooner than expected, returning us to some sense of normalcy," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

Travel-related stocks, which have been clobbered by restrictions to contain the pandemic's spread, were in demand.

Shares of United Airlines Holdings Inc, American Airlines Group Inc, Carnival Corp and Norwegian Cruise Line Holdings Ltd all ended sharply higher.

But COVID-19 continued its US rampage, with cases surging past 11 million and record infections in 40 states, prompting states to tighten social distancing mandates.

"Wall Street is looking out six to 12 months down the road," Pavlik added.

"There is a question about ... what kind of damage will be inflicted on the economy between now and then."

Unofficially, the Dow Jones Industrial Average rose 478.72 points, or 1.62 per cent, to 29,958.53, the S&P 500 gained 42.17 points, or 1.18 per cent, to 3,627.32 and the Nasdaq Composite added 94.84 points, or 0.8 per cent, to 11,924.13.

Earnings from high-profile retailers are expected this week, with Walmart and Home Depot Inc expected to report on Tuesday and Lowe's Companies Inc and Target Corp on Wednesday.

This, together with the Commerce Department's October retail sales data, expected on Tuesday, should provide evidence of how consumers are weathering a languid economic recovery as stimulus runs dry.

Simon Property Group shares jumped after the biggest US mall operator cut its purchase price for an 80 per cent stake of rival Taubman Centers, as the pandemic pressures the retailers.