US: Wall Street extends rally, pushing S&P 500 to record close

[NEW YORK] Wall Street ended higher in a late-summer, light volume rally on Tuesday as the FDA's full approval of a Covid-19 vaccine on Monday and the absence of negative catalysts kept risk appetite alive ahead of the much-anticipated Jackson Hole Symposium.

All three major US stock indices advanced higher, with the S&P 500 and the Nasdaq closing at all-time closing highs.

The session marked the S&P 500's 50th record high close so far this year.

Tech and tech-adjacent megacaps were once again doing the heavy lifting, but economically sensitive cyclicals and smallcaps outperformed the broader market.

"Investors are looking at the horizon at the big Jackson Hole meeting on the horizon," Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina, referring to the Federal Reserve's annual economic symposium on Friday. "But for now the feel-good from yesterday's vaccine news is still in the air."

The Food and Drug Administration's full approval of the Pfizer-BioNTech Covid-19 vaccine on Monday fuelled optimism over economic recovery which spilled into Tuesday's session.

Travel and leisure sectors, associated with economic re-engagement, outperformed the broader market. The S&P 1500 Airline and Hotel/Restaurant/Leisure indices gained up 3.7 per cent and 1.6 per cent, respectively.

"We have energy, retail, travel, leisure, financials and small caps all doing well today," Mr Detrick said. "And that's a sign that the reopening is alive and well."

Recent economic indicators suggest the recovery from the most abrupt recession in US history is headed in the right direction, but not to the extent that is likely to prompt the Fed to tighten its dovish monetary policy.

Fed chair Jerome Powell is due to meet with other world bank leaders when the Jackson Hole Symposium convenes later this week, and his remarks will be closely parsed for any clues regarding the Fed's tapering of asset purchases and hiking key interest rates.

The event will take place virtually and not in person due to the spread of Covid-19 in the county, which has reduced expectations that any major announcement will be made at the event.

"The fact that the Fed is having a virtual (Jackson Hole) meeting tells you that they might be thinking maybe they need to keep supporting the economy," said Mr Detrick.

The Dow Jones Industrial Average rose 30.55 points or 0.09 per cent to 35,366.26, the S&P 500 gained 6.7 points or 0.15 per cent to 4,486.23 and the Nasdaq Composite added 77.15 points or 0.52 per cent to 15,019.80.

Energy was the top gainer among the 11 major sectors in the S&P 500, boosted by the continued rally in crude prices .

Best Buy jumped 8.3 per cent after the electronics retailer beat analyst earnings expectations and raised its full year sales forecast.

US-listed shares of China-based e-commerce platform Pinduoduo surged 22.2 per cent after reporting its first ever quarterly profit.

JD.com gained 14.4 per cent in the wake of the Chinese online retailer's remarks on Monday that it does not expect any business impact from a wave of regulations hitting the industry at home.

Other shares of Chinese companies listed on US exchanges were bouncing back as well, with the Invesco Golden Dragon ETF jumping 8 per cent.

Cybersecurity firm Palo Alto Networks advanced 18.6 per cent as brokerages raised their price targets following its full-year forecast beat.

Advancing issues outnumbered declining ones on the NYSE by a 2.17-to-1 ratio; on Nasdaq, a 1.82-to-1 ratio favoured advancers.

The S&P 500 posted 28 new 52-week highs and one new low; the Nasdaq Composite recorded 96 new highs and 37 new lows.

Volume on US exchanges was 8.97 billion shares, compared with the 9.08 billion average over the last 20 trading days.

REUTERS