S&P 500 futures climb to record high on vaccine, stimulus bets

(Reuters) – Dow futures rose and S&P 500 futures hit a record high on Wednesday as hopes for a vaccine-linked economic recovery and more domestic fiscal stimulus sparked demand for economically sensitive stocks such as banks and industrials.

FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York, U.S., November 24, 2020. REUTERS/Brendan McDermid

Investors have flocked to U.S. equities and shrugged off weak economic data in recent weeks on signs that a working COVID-19 vaccine would be available before the end of the year.

The race for a vaccine narrowed on Tuesday after the U.S. Food and Drug Administration raised no new issues about the safety or efficacy of Pfizer Inc’s candidate, while Johnson & Johnson reported it could obtain late-stage trial results for a single-dose vaccine earlier than expected.

Both drugmakers’ shares gained about 1% in premarket trading.

President-elect Joe Biden has also vowed that his administration would vaccinate 100 million Americans during his first 100 days in office, push to reopen schools and strengthen mask mandates.

At 6:48 a.m. ET, Dow e-minis were up 67 points, or 0.22%, S&P 500 e-minis were up 5.25 points, or 0.14%, and Nasdaq 100 e-minis were down 9.25 points, or 0.07%.

With valuations now at extremely high levels, some investors worry that stocks could be more vulnerable to any bad news such as unexpected setbacks in the roll-out of vaccines or delays in stimulus.

U.S. lawmakers continued to negotiate on a long-awaited coronavirus relief package, but provisions on liability protections for businesses and aid to state and local governments are causing divisions between Republicans and Democrats.

The Trump administration proposed a new $916 billion aid package on Tuesday, after congressional Democrats shot down a suggestion for a pared-down plan.

Major U.S. banks JPMorgan Chase & Co and Citigroup Inc as well as industrial bellwethers Boeing Co and 3M Co rose about half a percent.

Travel stocks including United Airlines Holdings Inc and American Airlines Group Inc gained 1.3% and 2.7%.

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