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* Novavax jumps, to test vaccine candidate on humans
* Beaten down travel-related stocks surge
* Indexes up: Dow 2.35%, S&P 1.85%, Nasdaq 1.36%
(Updates to open)
By Medha Singh and Uday Sampath Kumar
May 26 (Reuters) - U.S. stocks jumped and the S&P 500
breached 3,000 points on Tuesday as optimism about a potential
coronavirus vaccine and a revival in business activity helped
investors overlook simmering Sino-U.S. tensions.
The benchmark index traded above the key psychological level
and also above its 200-day moving average, a closely watched
long-term trend indicator, for the first time since March 5.
All 11 S&P sector indexes gained in early trading, with
cyclical financials .SPSY , industrials .SPLRCI and energy
.SPNU stocks jumping more than 3%.
The S&P 500 has risen about 37% from its March lows on a
raft of central bank and government stimulus, and is now just
about 11% below its February record high.
On Monday, California decided to reopen in-store retail
businesses and places of worship from one of the most
restrictive shutdowns in the United States. "People have been locked up and when they see sparkles of
hope like vaccines, that drives optimism probably ahead of where
it should be and clearly ahead of the economy," said Richard
Steinberg, chief market strategist at Colony Group in Florida.
At 10:01 a.m. ET, the Dow Jones Industrial Average .DJI
was up 575.66 points, or 2.35%, at 25,040.82, the S&P 500 .SPX
was up 54.53 points, or 1.85%, at 3,009.98, and the Nasdaq
Composite .IXIC was up 126.77 points, or 1.36%, at 9,451.36.
U.S. biotech group Novavax Inc NVAX.O jumped 17.3% as it
joined the race to test coronavirus vaccine candidates on humans
and enrolled its first participants. Merck & Co Inc MRK.N added 1.5% as it announced plans to
develop two separate vaccines. But with U.S. unemployment soaring beyond 14% and
macroeconomic data pointing at a deep recession, analysts warned
financial markets could be betting on too fast a recovery.
"Business cycles don't simply end in two to three months -
in a way that's what some of these sectors are pricing. It's
going to be very slow," said Patrick Fruzzetti, managing
director and senior research analyst at the Rosenau Group.
Beaten down travel-related stocks soared, with S&P 1500
airlines index .SPCOMAIR up 10.3% and cruise operators
including Carnival Corp CCL.N more than 12%.
Advancing issues outnumbered decliners more than 9-to-1 on
the NYSE and 5-to-1 on the Nasdaq.
The S&P index recorded 13 new 52-week highs and no new low,
while the Nasdaq recorded 83 new highs and four new lows.
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