The Dow Jones Industrial Average traded above 30,000 points for the first time Tuesday as investors were encouraged by the latest progress on developing coronavirus vaccines and news that the transition of power in the U.S. to President-elect Joe Biden will finally begin.
Traders were also encouraged by news that Biden had selected Janet Yellen, a widely respected former Federal Reserve chair, as treasury secretary. The Dow rose more than 400 points, or 1.4%, to trade just over 30,000 at midday Tuesday. The S&P 500 index, which has a far greater impact on 401(k) accounts than the Dow, rose 1.3%.
The gains extend a monthlong market rally driven by growing optimism that the development of coronavirus vaccines and treatments will loosen the pandemic's stranglehold on the economy. They also mark a rapid climb for the Dow from its March 23 low of just under 18,600 during the worst of its early pandemic nosedive.
The Dow jumped 440 points, or 1.5%, to 30,032 as of 11:38 a.m. Eastern time. Boeing, which brings a heavyweight to the Dow, rose 3.8%. The technology-heavy Nasdaq composite was up 1%.
Traders are favoring stocks that stand to gain the most from a gradual reopening of the economy, such as banks and industrial companies. Overseas markets also rose. Treasury yields and oil prices were headed higher.
On Monday, the head of the federal General Services Administration acknowledged that Biden is the apparent winner of this month’s presidential election. That allows the incoming president to coordinate with federal agencies on plans for taking over on Jan. 20, despite ongoing efforts by President Donald Trump to overturn the election.
Word that Biden has chosen Yellen as treasury secretary also added to investors' confidence. Widely admired in the financial world, Yellen would be the first woman to lead the department in a line stretching back to Alexander Hamilton in 1789, taking on a pivotal role to help shape policies at a perilous time.
Stocks have been pushing higher this month, driving the S&P 500 up by more than 10%, as investors have grown more hopeful that the development of coronavirus vaccines and treatments will help pave the way for the economy to recover next year.
The latest vaccine developments are also tempering lingering concerns over rising virus cases in the U.S., as well as in Asia and other parts of the world, and new government restrictions on businesses aimed at limiting the spread.
On Monday, drugmaker AstraZeneca reported surprisingly good results from ongoing vaccine studies. It said its potential vaccine, which is being developed with Oxford University, was up to 90% effective. Unlike rival candidates, AstraZeneca’s doesn’t have to be stored at ultra-cold temperatures, making it easier to distribute.
Last week, Pfizer and Moderna both reported study results showing their vaccines were almost 95% effective. And, over the weekend, Regeneron Pharmaceuticals received U.S. government approval for emergency use of its COVID-19 treatment. The drug, which Trump received when he was sickened last month, is meant to try to prevent hospitalization and worsening disease from developing in patients with mild-to-moderate symptoms.
Treasury yields rose as investors became more optimistic about the prospects for economic growth. The yield on the benchmark 10-year Treasury note rose to 0.88% from 0.84% late Monday.
Trading is expected to be light on Wall Street this week ahead of the Thanksgiving holiday on Thursday when U.S. stock markets will be closed. They will reopen on Friday for a half-day session.
European markets were broadly higher, and Asian markets closed mixed.