Stocks rose on Wednesday on the back of strong Disney earnings and coronavirus vaccine hopes as the broader market approached reached record levels set earlier this year.
The S&P 500 advanced 0.6% to 3,327.77 and the Nasdaq Composite climbed 0.4% to 10,998.40. The Nasdaq briefly broke above 11,000 for the first time and posted a six-day winning streak. The S&P 500 closed higher for a fourth straight day. The Dow Jones Industrial Average also posted a four-day winning streak, rallying 373.05 points, or 1.4%, to 27,201.52.
Monday's gains put the S&P 500 about 2% below a record set on Feb. 19. The broader market index has rallied more than 50% since hitting an intraday low on March 23, led in large part by major tech stocks such as Facebook, Amazon, Netflix, Apple, Alphabet and Microsoft.
Ari Wald, head of technical analysis at Oppenheimer, points out that while the rally from the March low has been "concentrated" in a small group of stocks, it's only a matter of time until the rest of the market participates in the surge.
"We haven't gotten the all-clear," said Wald. But "One by one, you're going to see these areas that haven't participated start to break out to the upside ... You want to see more stocks trading above their 200-day moving average on the NYSE. That usually marks the start of a steadier bull market."
Disney earned 8 cents per share, while analysts expected a loss of 64 cents per share. Disney said it now has 100 million paid subscribers across its streaming services, which include Disney+, Hulu and ESPN+. Disney shares popped 8.8%.
Johnson & Johnson announced it struck a $1 billion deal with the U.S. government to manufacture 100 million doses of its coronavirus vaccine candidate if it proves successful. J&J shares rose 0.8%. Novavax shares jumped 10.4% after the company reported phase one vaccine trial results that showed a positive immune response among patients.
Airline stocks rose broadly after Senate Republicans said they supported an additional $25 billion in federal aid for the industry. United Airlines closed 4.5% higher and Delta advanced 3.1%. American Airlines jumped 9.5%.
ADP payrolls data disappoints
ADP reported Wednesday that private payrolls in the U.S. increased by just 167,000 in July. That's well below a Dow Jones estimate of 1 million and represents a tumble from the 4.314 million added in June.
The ADP report is seen as a preview to the government's monthly jobs report, which is forecast to show a gain of more than 1.2 million jobs.
To be sure, the Institute for Supply Management's non-manufacturing PMI showed a bigger-than-expected expansion in the U.S. services sector, coming in at 58.1. Economists polled by Dow Jones expected a print of 55.
Traders also grappled with continuing talks in Washington over a new coronavirus stimulus package.
The White House appeared to make concessions in the bargaining over extended unemployment benefits. The Trump administration team reportedly offered to extend extra federal unemployment insurance into December at $400 per week. Still, lawmakers remain divided on certain issues including aid for state and local governments and funding for schools.
"The bottom line is that if we do see real disappointment in stimulus or the vaccine, then a 10% correction is the likely best-case scenario, and it'll come quickly," said Tom Essaye of The Sevens Report, in a note. "We cannot be complacent."
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S&P 500 closes higher for a fourth day, now just 2% from its February record as Disney rallies - CNBC
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