Wednesday’s Stock Market Close: US Equities Rise On Goldman Sachs Strong Earnings, Moderna’s Promising Virus Vaccine

U.S. stocks rose on Wednesday on some positive developments on the COVID-19 vaccine front and a blowout quarter by Goldman Sachs (GS).

The Dow Jones Industrial Average gained 227.51 points to 26,870.10, while the S&P 500 rose 29.04 points to 3,226.56 and the Nasdaq Composite Index advanced 61.91 points to 10,550.49.

Wednesday’s volume on the New York Stock Exchange totaled 4.04 billion shares with 2,524 issues advancing, 97 setting new highs, and 490 declining, with four stocks setting new lows .

Active movers were led by Genetic Technologies Ltd. (GENE), American Airlines (AAL) and Nio (NIO).

Drugmaker Moderna (MRNA) said its potential COVID-19 vaccine produced antibodies in all 45 patients in an early stage human trial.

Moderna shares jumped 6.9% on the day.

“A COVID-19 cure/vaccine is a binary event for markets, and there are many ‘shots on goal’ on the healthcare side and only one needs to be successful,” said Tom Lee, founder and head of research at Fundstrat Global Advisors. “There are piles of cash seen in hedge funds, macro funds, mutual funds and individual investors. If the cadence of healthcare data continues to support some sort of cure, the focus on ‘re-closings’ ultimately fades.”

“The vaccine news is clearly a positive development,” said Mark Nash, head of global fixed income at Merian Global Investors. “But it’s still long way off. The fear of the W-shaped recovery is probably very high at the moment. Good news is that markets still have a chance to ride it out because the Fed has bought time, so financial conditions can stay easy until growth kicks in.”

Goldman Sachs posted second quarter earnings that far exceeded analysts’ expectations.

“Clearly, in the second quarter, you’re seeing very robust results in investment banking, very strong trading results on one hand,” said Jason Goldberg, senior analyst at Barclays. “On the other hand, these results are being pressured by significant reductions in net interest margins as well as pretty sizable increases in bank loan-loss reserves.”

The U.S. now has more than 3.4 million confirmed cases of covid-19, while deaths have passed 136,000, leading some states like California to postpone reopening their economies.

The New York Fed’s Empire State’s business conditions index rose to 17.2 in July from minus- 0.2 in June.

Overnight in Asia markets finished mixed, as China’s Shanghai Composite index dropped 1.56%; Japan’s Nikkei-225 gained 1.59%; and Hong Kong’s Hang Seng exchange edged up 0.01%.

In Europe markets closed higher, as Britain’s FTSE-100 gained 1.83%, while France’s CAC-40 climbed 2.03% and Germany’s DAX rose 1.84%.

Crude oil futures rose 1.76% at $41 per barrel, Brent crude edged down 0.3% at $43.66. Gold futures inched up 0.02%.

The yield on the 10-year Treasury gained 2.44% to 0.63% while yield on the 30-year Treasury rose 2.23% to 1.331%.