Wall Street set for strong start to December on vaccine optimism

Wall Street set for strong start to December on vaccine optimism

© Reuters. FILE PHOTO: A Wall St. sign is seen near the NYSE in the financial district in New York © Reuters. FILE PHOTO: A Wall St. sign is seen near the NYSE in the financial district in New York

By Shriya Ramakrishnan and Medha Singh

(Reuters) – Wall Street's main indexes were set to open higher on Tuesday as better-than-expected factory data from China and hopes that a COVID-19 vaccine will be rolled out before the end of the year bolstered bets of a speedy economic recovery.

Investors are closely following updates on a handful of leading vaccine candidates as well as the start of global shipments as drugmakers submit paperwork for regulatory approvals.

Pfizer Inc (NYSE:PFE) gained about 2.3% in premarket trade as the drugmaker and Germany's BioNTech SE (NASDAQ:BNTX) sought emergency approval of their vaccine from the European regulator.

The partners are now neck-and-neck with rival Moderna (NASDAQ:MRNA), which said on Monday it would ask the EU regulator to recommend conditional approval for its shot.

"The market typically rallies in the last couple of months of the year," said Steven Blitz, chief U.S. economist at TS Lombard.

"There is more reason to be optimistic than pessimistic looking past whatever disruptions occur near-term from the virus because there is a vaccine coming and that is going to change everything."

Investors overlooked a resurgence in infections in the United States that has prompted state-wise restrictions, with California considering new "stay-at-home" orders.

Cruise operators Carnival (NYSE:CUK) Corp, Royal Caribbean (NYSE:RCL) Cruises Ltd and carriers Delta Air Lines Inc (NYSE:DAL) and United Airlines Holdings (NASDAQ:UAL) rose between 2% and 5%.

Big U.S. banks, which are sensitive to the economic outlook, gained between 1.4% and 2.1%.

The Dow wrapped up its best month in more than three decades on Monday as breakthroughs in vaccine spurred a shift toward sectors hardest-hit by virus induced shutdowns.

At 08:21 a.m. ET, Dow E-minis were up 299 points, or 1.01% and S&P 500 E-minis were up 0.93%. Nasdaq 100 E-minis were up 0.89%.

China's manufacturing sector activity in November grew at its fastest pace in a decade, a business survey showed. Several other countries also reported sharp upticks in factory activity.

Later in the day, focus will shift to U.S. factory data as well as remarks from Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell at a congressional hearing, which is likely to highlight divisions over what more should be done in response to the pandemic.

Powell on Monday said that while the news on the vaccine front is very positive, its impact on the economy will be unclear until challenges such as vaccine production and mass distribution are resolved.

Among other stocks, Zoom Video Communications (NASDAQ:ZM) Inc dropped about 6.6% after the company warned its gross margins would remain under pressure going into 2021.

Tesla (NASDAQ:TSLA) Inc rose about 4.5% after S&P Dow Jones Indices said it would add one of Wall Street's most valuable companies to the S&P 500 index all at once on Dec. 21.

Original Article

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