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US: Stocks gain despite rising China tensions

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Wall Street stocks finished a choppy session higher on Wednesday as investors weighed progress towards a coronavirus vaccine against worries over worsening US-China relations.

[NEW YORK] Wall Street stocks finished a choppy session higher on Wednesday as investors weighed progress towards a coronavirus vaccine against worries over worsening US-China relations.

The Dow Jones Industrial Average finished up 0.6 per cent at 27,005.73.

The broad-based S&P 500 also climbed 0.6 per cent to 3,276.05, while the tech-rich Nasdaq Composite Index advanced 0.2 per cent to 10,706.13.

US-China tensions, already rising because of the coronavirus pandemic and Beijing's crackdown in Hong Kong, ratcheted up another notch as the United States ordered the closure of the Chinese consulate in Houston within 72 hours.

Meanwhile, German firm BioNTech and Pfizer announced that the US government had agreed to pay almost US$2 billion for 100 million doses of a potential coronavirus vaccine if regulatory approval is granted.

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Pfizer led the Dow, gaining 5.1 per cent.

The progress towards a vaccine has offset worries about spiking US coronavirus cases, though analysts caution it could take more time than the market expects to widely distribute a vaccine.

The National Association of Realtors reported sales of existing US homes jumped a record 20.7 per cent in June, ending three months of coronavirus-driven declines as buyers returned to the market.

Among individual companies, Best Buy surged 7.8 per cent after it said that its second-quarter sales were on track to increase 2.5 per cent compared with the year-ago period, and that it was raising starting pay for workers to US$15 an hour.

Nike gained 0.6 per cent as it said it expects to cut jobs during a revamp of its organization, aiming to accelerate direct-to-consumer initiatives amid the coronavirus pandemic.

United Airlines fell 4.2 per cent after reporting a US$1.6 billion loss in the second quarter.

Executives offered a cautious outlook on flying demand, saying they do not expect a full recovery until a Covid-19 vaccine is developed and widely available.

AFP

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