Ten of the 11 major S&P 500 sub-sectors rose in early trading, with energy, materials and industrial, which are expected to benefit the most from an economic rebound, gaining the most.
The chances of a bigger stimulus check dimmed on Tuesday after Senate Majority Leader Mitch McConnell blocked a quick vote to back President Donald Trump’s call to increase COVID-19 relief checks.
The move resulted in Wall Street’s three main indexes slipping from intraday record highs in the previous session, but investors hoped that a deal will get done eventually.
“The market is of the view that U.S. households will receive additional support a few months down the line even if the government decides to pull back higher stimulus checks,” said Piotr Matys, FX strategist at Rabobank.
At 09:40 a.m. ET, the Dow Jones Industrial Average rose 115.80 points, or 0.39% , to 30,451.42, the S&P 500 gained 13.47 points, or 0.36 %, to 3,740.51 and the Nasdaq Composite gained 45.05 points, or 0.35 %, to 12,894.02.
Meanwhile, the first known U.S. case of a highly infectious, coronavirus variant discovered in Britain was detected in Colorado. Scientists believe the new variant is more contagious than previously identified strains of the SAR-CoV-2 variant but no more severe in the symptoms it causes.
To date, the pandemic has infected more than 19 million people and killed over 334,000 in the United States.
“The bigger question is if the vaccine is effective against the new strain or not. If the answer is yes, the recovery rally continues and if it is no, that’s a serious issue,” said Dennis Dick, a trader at Bright Trading LLC.
However, trillions in dollar of stimulus and progress in developing vaccines helped the benchmark S&P 500 index, bounce back nearly 70% from its late-March trough.
The index is on course to end the month with a 3% gain after a 10.8% rally in November.
Technology stocks, which have powered much of this year’s gains, were up marginally.
Covid-19 vaccine developers like Inovio Pharmaceuticals , Pfizer Inc, BioNTech SE and Johnson & Johnson and Moderna Inc were mixed after approval of AstraZeneca’s COVID-19 shot.
Trading is expected to remain light in the holiday-shortened week, which could boost volatility in the market.
Advancing issues outnumbered decliners by a 3-to-1 ratio on the NYSE and by a 2.7-to-1 ratio on the Nasdaq.
The S&P 500 posted 14 new 52-week highs and no new lows, while the Nasdaq recorded 132 new highs and 20 new lows.