Wall Street surges on vaccine breakthrough hopes

NEW YORK, New York – U.S. stocks took off on Wednesday, mainly based on hopes for a breakthrough for a Covid-19 vaccine.

Moderna reported some success in its search for a vaccine, sending its shares 6.90% higher.

“The market is trading fairly ‘risk on’ on vaccine hopes,” Gennadiy Goldberg, an interest rate strategist at TD Securities in New York told the Reuters Thomson news agency Wednesday. “It’s largely COVID news driving the price action recently.”

Cruise lines including Carnival and Royal Caribbean, and hospitality giants such as Wyndham, Marriott and Wynn Resorts also made giant leaps, in one case as high as 21%.

“The Moderna news woke everybody up again that this is not going to last forever, and there is light at the end of the tunnel. That is why you are seeing such a strong move today into those economically sensitive stocks,” Tim Ghriskey, Chief Investment Strategist Inverness Counsel in New York was quoted as saying by Reuters Thomson on Wednesday.

At the close of trading Wednesday the Dow Jones Industrial Average was ahead 227.51 points or 0.85% at 26,870.03.

The Standard and Poor’s 500 rose 29.04 points or 0.91% to 3,226.55.

The Nasdaq Composite added 63.92 points or 0.59% to 10,550.49.

The U.S. dollar continued to struggle after coming under intense pressure during the Asian trading session.

The euro remained above 1.1400, albeit below its Asian close of 1.1442, to trade at 1.1412 around the New York close.

The British pound too came off its Asian highs to be changing hands at 1.2589. The Japanese yen edged ahead to 106.94. The Swiss franc fell sharply to 0.9443. The Canadian dollar rose strongly to 1.3506. Profit-takers honed in on the Aussie dollar, paring it back to 0.7007. The New Zealand dollar was sharply higher at 0.6571.

Overseas, European and UK equity markets surged ahead as well. The FTSE 100 in London gained 1.83%, while in Germany, the Dax was up 1.84%. The Paris-based CAC 40 did best of all, rising 2.03%.

On Asian markets, stocks in China tumbled on Wednesday as the United States stepped up pressure on a broad range of fronts.

Overnight British Prime Minister Boris Johnson’s government banned Huawei from participating in its 5G Networks, even as a parts supplier. U.S. President Donald Trump later took credit for the decision. “I did it myself,” he said in referring to pressure the U.S. has brought on a number of countries, including the UK, to isolate the world’s largest telco.

Mr Trump on Tuesday also said he was not willing to talk to Beijing about a Phase 2 trade deal because China had brought on ‘the plague.’

Then on Tuesday Mr Trump announced the U.S. was ending its preferential status of Hong Kong, saying it was to punish China. To top the day off the president signed a bill approved by the U.S. Congress to penalise banks doing business with Chinese officials who implemented the new security law.

The measures announced Tuesday followed Monday’s announcement that the United States had rejected claims by China to offshore resources in the South China Sea. “We are making clear, Beijing’s claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them,” U.S. Secretary of State Mike Pompeo said Monday.

“The world will not allow Beijing to treat the South China Sea as its maritime empire,” he added.

Since the Asian close the U.S. has ratcheted up the pressure further with Secretary of State Mike Pompeo announcing on Wednesday that executives from Chinese technology companies, including Huawei, could face visa restrictions, and were being put on notice.

With pressure mounting, China’s Shanghai Composite dived 53.31 points or 1.56% to 3,361.30. The blue-chip CSI300 index was down 1.29%, with its financial sector sub-index lower by 2.26%.

The consumer staples sector was up 0.93%, the real estate index was down 2.88% while the healthcare sub-index rose 1.78%.

The smaller Shenzhen index fell 2.07%.

China was the only major country to record stock losses in Asia on Wednesday, while Hong Kong remained flat with a 3.69 points or 0.01% gain to 25,481.58.

In Japan, the Nikkei 225 jumped 358.49 points or 1.59% to 22,945.50.

The Australian All Ordinaries advanced 114.90 points or 1.90% to 6,160.40.

Published at Wed, 15 Jul 2020 22:52:04 +0000

Source: Wall Street surges on vaccine breakthrough hopes.

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