Vaccine, Yellen Boost Markets As Tech Declines

Cyclicals led gains, with energy ahead by 7.09 percent while industrials and financials each rose more than 1 percent, as data showed monthly business activity expanded at the fastest rate in more than five years.

Energy shares got a boost from another gain in oil prices, which have risen on anticipation a vaccine will help demand recover.

"It's Monday vaccine trade day," said Ken Polcari, managing partner at Kace Capital Advisors in Jupiter, Florida.

"As they move out of those growth names, it's still this continued move into larger cyclical, value names which is why you see the Dow performing so well and the Nasdaq under some pressure."

Declines in technology and tech-related heavyweight names such as Apple Inc and Netflix Inc muted gains as investors rotated out of stocks seen as safe bets following a coronavirus-led crash earlier this year.

Major averages got a late boost after the Wall Street Journal reported US President-elect Joe Biden plans to nominate former Federal Reserve Chair Janet Yellen to be the next Treasury secretary.

"A known commodity in a uncertain situation is a potential boon for the market," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

"The Treasury is probably more important than congress in getting the next stimulus package through. This removes a huge roadblock."

The Dow Jones Industrial Average rose 1.12 percent, to 29,591, the S&P 500 gained 0.56 percent, to 3,578 and the Nasdaq Composite added 0.22 percent, to 11,881.

Evidence of high efficacy rates in experimental Covid-19 vaccines had lifted the S&P 500 to a record high this month and brought the blue-chip Dow close to breaching 30,000 points for the first time, breathing new life into cyclical stocks that were beaten down during the recession.

AstraZeneca on Monday became the latest major drugmaker to say its vaccine could be around 90 percent effective, while the US health regulator is likely to approve in mid-December the distribution of Pfizer's vaccine.

Volume is expected to be on the lighter side moving closer to the Thanksgiving holiday on Thursday. (Reuters)