Following the rally seen early in the session, stocks continue to see considerable strength in mid-day trading on Tuesday. The upward move on the day has lifted the Nasdaq and the S&P 500 to new record intraday highs.
Currently, the major averages remain firmly in positive territory. The Dow is up 270.71 points or 0.9 percent at 29,909.35, the Nasdaq is up 172.18 points or 1.4 percent at 12,370.92 and the S&P 500 is up 47.98 points or 1.3 percent at 3,669.61.
Strength in the overseas markets has carried over on Wall Street following the release of upbeat Chinese manufacturing data.
China's manufacturing sector logged its strongest growth in a decade in November to indicate a sustained recovery from the Covid-19 outbreak, survey data from IHS Markit showed.
Continued optimism about a potential coronavirus vaccine has also generated buying interest, with Pfizer (PFE) and BioNTech (BNTX) applying to the European Medicines Agency for conditional marketing authorization of their vaccine.
Meanwhile, traders have largely shrugged off a report from the Institute for Supply Management showing a slowdown in the pace of growth in U.S. manufacturing activity.
The ISM said its manufacturing PMI dropped to 57.5 in November from 59.3 in October, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to dip to 58.0.
"Survey Committee members reported that their companies and suppliers continue to operate in reconfigured factories," said Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee.
"But absenteeism, short-term shutdowns to sanitize facilities and difficulties in returning and hiring workers are causing strains that will likely limit future manufacturing growth potential," he added. "Panel sentiment, however, is optimistic."
A separate report from the Commerce Department showed a bigger than expected increase in construction spending in the month of October.
In testimony before the Senate Banking Committee, Federal Reserve Chair Jerome Powell called the economic outlook "extraordinarily uncertain" and noted it will depend, in large part, on the success of efforts to keep the coronavirus in check.
"The rise in new COVID-19 cases, both here and abroad, is concerning and could prove challenging for the next few months," Powell said. "A full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities."
"Recent news on the vaccine front is very positive for the medium term," he added. "For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups."
Sector News
Steel stocks continue to see substantial strength on the upbeat Chinese manufacturing data, with the NYSE Arca Steel Index spiking by 4.3 percent to its best intraday level in well over a year.
Significant strength has also emerged among gold stocks, as reflected by the 3.5 percent jump by the NYSE Arca Gold Bugs Index.
The rally by gold stocks comes amid a sharp increase by the price of the precious metal, with gold for February delivery soaring $33.50 to $1,814.40 an ounce.
Airline stocks are also seeing considerable strength in mid-day trading, resulting in a 3.2 percent increase by the NYSE Arca Airline Index.
Banking, oil service and semiconductor stocks have also moved notably higher amid broad based buying interest on Wall Street.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.3 percent, while China's Shanghai Composite Index spiked by 1.8 percent.
The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index soared by 1.9 percent, the French CAC 40 Index surged up by 1.1 percent and the German DAX Index advanced by 0.7 percent.
In the bond market, treasuries have moved notably lower amid the rally on Wall Street. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.2 basis points at 0.916 percent.
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