Wall Street Update: S&P 500, Nasdaq hit record highs on recovery optimism

Energy, travel shares rise on improving demand hopes; Best Buy gains on raising full-year sales forecast

The S&P 500 and Nasdaq hit record highs on Tuesday, boosted by oil and  , after a full U.S. approval of a COVID-19 vaccine raised hopes of a quicker economic recovery.

Seven of the 11 major S&P sectors advanced in early trading, with energy, industrial and financial stocks building on Monday’s gains after the U.S. FDA fully approved Pfizer’s COVID-19 vaccine.

Cruise operators including Carnival Corp rose more than 3%, while casino companies MGM Resorts and Wynn Resorts added between 2.9% and 4.7% on hopes that the approval would increase U.S. vaccination rates and spark a stronger rebound in travel and leisure.

The S&P 1500 airlines index rose 3.2%.

A surge in COVID-19 infections caused by the highly contagious Delta variant has whipsawed Wall Street this month on concerns about a slowing economic recovery from the health crisis.

Still, a strong earnings season and hopes that the Federal Reserve will maintain its ultra-loose monetary policy stance put the S&P 500 on course for its seventh straight monthly gain, with a 2% rise so far in August.

“The market can continue to grind higher as long as earnings momentum continues to build. It accurately reflects the balance of risks that investors see right now,” said Lauren Goodwin, economist and portfolio strategist at New York Life Investments.

“Despite some of the building concerns around Delta variant, the base case for many investors is that it will slow, not derail the economy.”

The Fed’s annual Jackson Hole symposium later this week will be closely watched for Chair Jerome Powell’s speech, which could offer clues on the central bank’s policy-tightening timeline.

At 10:34 a.m. ET, the Dow Jones Industrial Average rose 51.59 points, or 0.15% , to 35,387.30, the S&P 500 gained 10.69 points, or 0.24 %, to 4,490.22 and the Nasdaq Composite gained 76.74 points, or 0.51%, to 15,019.40.

Mega-cap growth names Apple Inc, Amazon.com and Google-owner Alphabet Inc rose 0.7% each.

A rally in U.S.-listed Chinese technology stocks also boosted the Nasdaq, with Pinduoduo Inc surging 17% after the e-commerce platform reported its first ever quarterly profit.

Shares of JD.com also gained 10.6% a day after its results and on comments that the Chinese online retail giant does not expect any business impact from a wave of regulations hitting the industry at home.

Best Buy Co Inc gained 5.5% after it raised its full-year comparable sales forecast, as the electronics retailer expects demand to be resilient.

Palo Alto Networks Inc jumped 16% as brokerages raised their price targets on the stock after the cybersecurity firm forecast full year 2022 earnings above Wall Street’s estimates.

Advancing issues outnumbered decliners by a 2.4-to-1 ratio on the NYSE and by a 1.7-to-1 ratio on the Nasdaq.

The S&P 500 posted 23 new 52-week highs and one new low while the Nasdaq recorded 91 new highs and 43 new lows.