Wall Street jumps on Goldman's strong numbers, Covid-19 vaccine hopes

The Dow Jones Industrial Average rose 367.22 points, or 1.38 per cent

Wall Street gained on Wednesday with the S&P 500 nearing its highest in more than four months following a strong quarterly showing by Goldman Sachs and promising early data for a potential Covid-19 vaccine.

The US lender jumped 2.9 per cent as its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.

Morgan Stanley gained 2.0 per cent and Bank of America 1.9 per cent ahead of their results on Thursday, which would wrap up earnings from the big six US banks. The broader banking index climbed 2.7 per cent.

Energy, industrials and financialstocks led gains among the major S&P sectors.

"Better-than-expected earnings help the mood because we're in an environment where expectations have gotten very low," said Stephen Lee, portfolio manager at Logan Capital Management in Newtown Square, Pennsylvania.

The three main US stock indexes have recouped most of their losses from the coronavirus-led slump, with a raft of stimulus measures and encouraging economic data lifting the S&P 500 to within 5 per cent of its record high hit in February.

With the second-quarter earnings season now underway, investors are looking for annual forecasts from marquee companies for signs of the pace of the rebound in Corporate America.

Wall Street's fear gauge eased for the second straight day after spiking on Monday amid a record surge in US coronavirus cases.

"We're not surprised to see volatility on a day-to-day basis as investors balance between better-than-expected proven recovery, waiting to see earnings results, and how successfully this healthcare challenge is going to be managed," Lee said.

UnitedHealth Group Inc fell 2.3 per cent after warning of rising costs later this year as Americans catch up on less urgent surgeries halted by the coronavirus pandemic.

Moderna Inc surged 17.8 per cent to a record high after a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies, bolstering hopes the shot could prove effective in later stages of testing.

Travel-related stocks Carnival Corp, Royal Caribbean Cruises Ltd, Marriott International and Wynn Resorts rose between 4.6 per cent and 8.2 per cent, with the S&P 1500 airlines index up 5.5 per cent.

At 9:38 a.m. ET, the Dow Jones Industrial Average was up 264.92 points, or 0.99 per cent, at 26,907.51, the S&P 500 was up 25.78 points, or 0.81 per cent, at 3,223.30, and the Nasdaq Composite was up 49.05 points, or 0.47 per cent, at 10,537.62.

Apple rose 1.2 per cent after Europe's second-top court rejected an EU order to the iPhone maker to pay 13 billion euros ($14.78 billion) in Irish back taxes.

Advancing issues outnumbered decliners 5.67-to-1 on the NYSE and 4.55-to-1 on the Nasdaq.

The S&P index recorded 18 new 52-week highs, while the Nasdaq recorded 32 new highs. Neither index recorded a new low.