S&P 500 scales over 4-month peak on vaccine hopes, Goldman profit beat

Credit: REUTERS/Lucas Jackson

By Medha Singh and Devik Jain

July 15 (Reuters) - Wall Street gained on Wednesday with the S&P 500 hitting its highest in more than four months following a strong quarterly showing by Goldman Sachs and promising early data for a potential COVID-19 vaccine.

The U.S. lender GS.N jumped 1.4% as its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.

Morgan Stanley MS.N gained 0.6% and Bank of America BAC.N 1.1% ahead of their results on Thursday, which would wrap up earnings from the big six U.S. banks. The broader banking index .SPXBK climbed 2.0%.

Energy .SPNY, industrials .SPLRCI and materials .SPLRCM led gains among the major S&P sectors.

"We're being led by the cyclical investing which means people believe that the economy has reached a nadir and is going to start trending higher," said Robert Pavlik, senior portfolio manager at SlateStone Wealth LLC in New York.

The three main U.S. stock indexes have recouped most of their losses from the coronavirus-led slump, with a raft of stimulus measures and encouraging economic data lifting the S&P 500 to within 5% of its record high hit in February.

With the second-quarter earnings season now underway, investors are looking for annual forecasts from marquee companies for signs of the pace of the rebound in Corporate America.

Wall Street's fear gauge .VIX eased for the second straight day after spiking on Monday amid a record surge in U.S. coronavirus cases.

"The market started off strong on the news that Moderna is finding some success in their interim phase one trials for a COVID-19 drug and the news from Goldman Sachs feeding by a wide margin," said Pavlik.

UnitedHealth Group Inc UNH.N fell 0.3% after warning of rising costs later this year as Americans catch up on less urgent surgeries halted by the coronavirus pandemic.

Moderna Inc MRNA.O surged 12.4% after a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies, bolstering hopes the shot could prove effective in later stages of testing.

Travel-related stocks Carnival Corp CCL.N, Royal Caribbean Cruises Ltd RCL.N, Marriott International MAR.O and Wynn Resorts WYNN.O rose between 7% and 11%, with the S&P 1500 airlines index .SPCOMAIR up 6.4%.

At 10:49 a.m. ET, the Dow Jones Industrial Average .DJIwas up 342.12 points, or 1.28%, at 26,984.71, the S&P 500 .SPXwas up 38.89 points, or 1.22%, at 3,236.41. The Nasdaq Composite .IXICwas up 114.95 points, or 1.10%, at 10,603.52.

Apple AAPL.O rose 1.6% after Europe's second-top court rejected an EU order to the iPhone maker to pay 13 billion euros ($14.78 billion) in Irish back taxes.

Advancing issues outnumbered decliners by a 6.41-to-1 ratio on the NYSE and by a 5.63-to-1 ratio on the Nasdaq.

The S&P index recorded 24 new 52-week highs and no new low, while the Nasdaq recorded 54 new highs and no new lows.

(Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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