Dow opens higher on more upbeat COVID-19 vaccine news

The Dow and the S&P 500 opened to the plus side on Wednesday following more promising news in the race for a COVID-19 vaccine and a landmark clearance for Boeing’s beleaguered 737 Max aeroplane.

The Dow Jones Industrial Average jumped almost 50 points, or 0.15 percent, to 29,8333.01 at the open of trading on Wall Street.

The broader S&P 500 index – a proxy for the health of retirement and college savings accounts –  and the Nasdaq Composite Index opened virtually unchanged.

Pfizer Inc and its German partner BioNTech said on Wednesday that final results from the Phase 3 trial of their COVID-19 vaccine showed it to be 95 percent effective – the highest success rate for any pandemic candidate in late-stage trials so far.

The companies said they will seek Emergency Use Authorization from the United States Food and Drug Administration “within days”.

Shares of Pfizer gained a little more than 3 percent at the open of trading.

On Monday, Moderna said preliminary trial data showed its COVID-19 vaccine to be 94.5 percent effective.

Vaccine news has ignited stock rallies since last week as investors rearrange portfolios in anticipation of an economic normalisation next year.

But the hopeful news comes as the virus is running rampant across the world. In the US, new infection rates are hitting records along with hospitalisations for COVID-19.

Officials in Europe and the US have ordered restrictions on public gatherings and businesses in an effort to curb the spread of the disease and reduce stress on healthcare systems. But those measures promise to weigh on an economic recovery that has already downshifted in the US.

Meanwhile, the divide between the haves and have-nots around the world and within countries is growing.

While Wall Street hits record highs, thousands of small businesses in the US are struggling to stay afloat and keep workers on payrolls.

Millions formally employed in the hospitality, travel and restaurant and bar industries are out of work. And without the arrival of more financial support from the government, people are running out of cash. Myriad federal pandemic relief schemes ranging from unemployment benefits to eviction moratorium are set to expire by the end of 2020.

On the flip side, those who are still working, including remote workers, are spending on renovations and home improvements and buying houses.

The housing market continues to be red hot. New home construction in the US rose a better-than-expected 4.9 percent to a seasonally adjusted rate of 1.53 million in October, the Commerce Department said on Wednesday.

As COVID-19 spreads, states from California to Illinois are imposing new restrictions, curfews and lockdowns. In Europe, where large economies like Germany are asking businesses to shutter and people to stay home, demonstrations against government lockdowns have turned violent.

Among stocks on the move on Wednesday:

Boeing shares jumped more than 3.5 percent after the FDA cleared the 737 MAX to fly again after a nearly two-year grounding following two deadly crashes.  But the Max returns to service at a time when the pandemic has gutted air travel as well as demand for new aircraft.

Shares of Target Corp were up just shy of 2 percent after the big-box retailer reported better than expected quarterly earnings and sales.