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Pfizer Omicron Vaccine Update Lifts Dow, Extends Best Rally Since March

Stocks look set to extend their strongest rally since March after Pfizer said three shots of its coronavirus vaccine provides solid protection against the emerging Omicron variant.

U.S. stocks moved higher again Wednesday, extending the best really on Wall Street since March, following news from drugmaker Pfizer that three doses of its coronavirus vaccine can provide solid protection against the Omicron variant.

Pfizer  (PFE) - Get Pfizer Inc. Report is also advancing the development of an Omicron-specific vaccine, with the company expressing "high confidence" that it will be available by March. 

The update swung markets positive territory in early trading, although investors will now likely shift focus to pending jobs and inflation data in anticipation of the Federal Reserve's next move on tapering heading into the final weeks of the year. Tech stocks, the most sensitive to interest rate changes, dipped modestly lower.

Market volatility, however, has fallen sharply from last week's levels, the highest in six months, amid reports of vaccine effectiveness against the variant, data showing certain therapy treatments preventing severe infection and comments from top-level experts that it likely isn't as dangerous as some prior mutations.

That's allowed investors to concentrate, at least in part, on Friday's pending November inflation data and its implications for Fed policy following Chairman Jerome Powell's hawkish turn during Senate Banking Committee testimony last week. An update on job vacancies form the October JOLTS report, meanwhile, showed 11.033 million unfilled positions, the second highest tally on record and 431,000 higher than the final September reading.

Investors may also a glimpse of investor concern linked to inflation pressures later today when the Treasury re-opens its last 10-year bond auction with the sale of $36 billion in new note, particularly given the fact that interest-rate sensitive 2-year paper is trading north of 0.7%, well ahead of the Fed's 0% to 0.25% rate target and the highest levels in two years.

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Ahead of all this, the Dow Jones Industrial Average gained 35 points in the opening hour of trading while the S&P 500 bumped 4 points into the green. 

The tech-focused Nasdaq Composite, meanwhile, fell 10 points as benchmark 10-year Treasury note yields rose to 1.513% in early New York trading.

Pfizer shares, which were 2.6% lower in pre-market trading prior to the update, fell 0.7% at the start of trading to change hands at $51.35 each.

Apple  (AAPL) - Get Apple Inc. Report shares were also in focus, hitting a fresh all-time high even amid reports that the tech giant fell far short of its iPhone production targets earlier this fall, owing to chip shortages and ongoing disruptions in global supply chains.

On the downside, Stitch Fix  (SFIX) - Get Stitch Fix, Inc. Class A Report shares plunged more than 24% after the online shopping and styling company cut its financial outlook amid reduced expectations of active customers using its offerings.

U.S. oil prices held past the $72 per barrel mark following data from the American Petroleum Institute late Tuesday that showed a 3.1 million barrel decline in domestic crude stocks, but noted a buildup in inventories at the key delivery hub in Cushing, Oklahoma. 

WTI futures for January delivery were marked 23 cents higher from Tuesday's close to change hands at $72.28 per barrel while Brent contracts for February, the global pricing benchmark, rose 44 cents to $75.80 per barrel.

In overseas markets, Europe's Stoxx 600 turned positive, rising 0.15% by mid-day trading in Frankfurt, following news of the Pfizer vaccine efficacy, extending the regional benchmark to a fresh seven-day high, while the Asia region MSCI ex-Japan index closed out the session with a 0.6% gain.