Stocks finished Wednesday higher on news that a coronavirus vaccine candidate from Moderna (MRNA) - Get Report produced the desired immune response and that Goldman Sachs Group (GS) - Get Report posted stronger-than-expected earnings.
Optimism was dented somewhat by reports that China vowed to retaliate after President Donald Trump stripped Hong Kong of its preferential trading status following sweeping new national security laws China imposed on the territory.
Bloomberg reported that Trump indicated to aides that he doesn’t want to further escalate tensions with Beijing, and has ruled out additional sanctions on top officials for now.
The Dow Jones Industrial Average finished up 227 points, or 0.85%, to 26,870, the S&P 500 gained 0.91% and the Nasdaq gained 0.59%.
At one point in Wednesday's trading the Dow industrials were up more than 425 points, or 1.6%
The S&P earlier had erased its loss for the year.
The Federal Reserve noted in its Beige Book report that economic activity rose in almost all districts but remained well below where it was prior to the pandemic.
Moderna finished up 7% after its vaccine, under development by the company and the U.S. National Institutes of Health, produced antibodies in all patients tested in an initial safety trial.
Moderna shares traded up as much as 18% on Wednesday.
The data were published Tuesday evening in the peer-reviewed New England Journal of Medicine.
Scientists will begin a 30,000-person study July 27 to determine the vaccine's effectiveness against the coronavirus, which has infected more than 13.3 million people across the globe and killed nearly 580,000.
The U.S. on Tuesday reported 67,417 new cases of the coronavirus, a single-day record.
“The cherry on top has to be the positive virus vaccine update as optimism on the vaccine is more than a show stopper. It's the ultimate recession stopper,” said Stephen Innes of AxiCorp.
“The positive coverage on a potential Covid-19 vaccine represents a rotating carousel of positive news that is overwhelming rising virus cases in the U.S.,” he added.
“This is really quite good news,” Anthony Fauci, the immunologist who directs the National Institute of Allergy and Infectious Diseases, told The Wall Street Journal in an interview.
“The gold standard of protection against a viral infection is neutralizing antibodies,” he added. “And the data from the study, small numbers as it may be, are pretty clear that this vaccine is capable of inducing quite good [levels] of neutralizing antibodies.”
AstraZeneca (AZN) - Get Report rose after a report said a medical journal would be releasing positive news regarding the coronavirus vaccine the biopharma giant has been developing with the University of Oxford.
Goldman Sachs posted better-than-expected second-quarter earnings as it followed Wall Street rivals with a surge in trading revenue linked to market volatility during the peak of the coronavirus pandemic.
Goldman Sachs reported earnings of $6.26 a share, up 7.7% from the year-earlier period and well ahead of analysts' estimates of $3.78.