Stocks finished higher Monday as investors welcomed further progress on the development of a coronavirus vaccine but remained cautious amid rising infection rates and worries that curbs on businesses to stem the spread of the virus could hamper an economic recovery.
The Dow Jones Industrial Average finished up 328 points, or 1.12%, to 29,591, the S&P 500 gained 0.56% and the Nasdaq ended up 0.22%.
The Covid-19 vaccine candidate being developed by AstraZeneca (AZN) - Get Astrazeneca PLC Sponsored ADR Report and the University of Oxford was found in a large trial to have prevented a majority of people from getting the disease.
Meanwhile, Moncef Slaoui, the chief scientific adviser for Operation Warp Speed, said some Americans could start receiving a Covid-19 vaccine by mid-December.
The positive developments come as cases of Covid-19, the disease caused by the coronavirus, topped 12.34 million in the U.S., according to Johns Hopkins University, and deaths in the U.S. reached 257,274.
"The stock market has reaffirmed its role as a discounting mechanism in looking past short-term concerns to the positive economic aspects of a Covid vaccine rollout," said Marc Chaikin, founder of Chaikin Analytics, a Philadelphia-based quantitative investment research firm.
Chaikin said his target for the S&P 500 was now "3,650 - 3,700 by year end, with even higher prices likely in 2021 after a successful Covid vaccine rollout."
President-elect Joe Biden has reportedly chosen former Federal Reserve Chair Janet Yellen Treasury secretary. Yellen would be the first woman to lead the department. She was also the first woman to serve as Fed chair after her Senate confirmation in 2014.
Stocks ended lower Friday amid growing fears over more economic damage from the coronavirus pandemic and the Treasury Department's abrupt curtailing of emergency economic programs.
The S&P 500 closed Friday at 3,557, falling 0.8% for the week and ending a two-week winning streak. The Nasdaq gained 0.2% last week.
American depositary receipts of AstraZeneca fell 1.08% Monday after the British drugmaker said late-stage trials on the coronavirus vaccine it conducted with Oxford University found the treatment was as much as 90% effective in preventing disease.
The average efficacy rate was 70%. But when a half dose of the vaccine was followed by a full dose a month later it showed 90% effectiveness.
Shots developed by Pfizer (PFE) - Get Pfizer Inc. Report and its German partner, BioNTech (BNTX) - Get BioNTech SE Report, and separately by Moderna (MRNA) - Get Moderna, Inc. Report, were found to be 95% and 94.5% effective, respectively, in late-stage trials.
Pfizer said Friday it applied with the Food and Drug Administration for emergency use approval of its vaccine.
The vaccine news also boosted oil prices. West Texas Intermediate crude for January delivery, the U.S. benchmark, rose 1.23% to $42.94 a barrel.
Only 13 companies in the S&P 500, led by Best Buy (BBY) - Get Best Buy Co., Inc. Report, Gap Inc. (GPS) - Get Gap, Inc. Report and Nordstrom (JWN) - Get Nordstrom, Inc. Report, are expected to report earnings during the Thanksgiving week.
With around 95% of the companies in the index reporting so far, third-quarter earnings are likely to fall 6.7% from last year, according to Refinitiv.