The S&P 500 and the Dow scaled record highs on Wednesday as hopes of a working COVID-19 vaccine and fresh economic stimulus before the end of the year lifted demand for economically sensitive energy and financial shares.
Seven of the 11 major S&P indexes were higher, with energy leading gains as crude prices climbed on hopes of a recovery in fuel demand. Oil majors Exxon Mobil Corp and Chevron Corp gained 1% in early trading.
Investors are banking on a long-awaited relief package to mitigate the economic damage from the COVID-19 pandemic that has led to millions of layoffs and overwhelmed the healthcare system.
Democratic Senator Joe Manchin said he expected Democrats and Republicans to work out most of the key details of the new aid package on Wednesday.
"The market remains very optimistic that some sort of a stimulus deal would be cut before the end of the year, and that would indicate the economy may not falter or wind up in a double-dip recession," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
Positive updates on COVID-19 vaccine development have also recently lifted Wall Street's main indexes, with investors swapping perceived safe-haven technology shares for industrial and banking stocks, which generally benefit most from an economic rebound.
On Wednesday, the S&P financials sector gained 0.3%, while industrial stocks added 0.2%.
By 10:08 a.m. ET, the Dow Jones Industrial Average was up 44.64 points, or 0.15%, at 30,218.56, the S&P 500 was up 4.49 points, or 0.12%, at 3,707.08, and the Nasdaq Composite was down 7.67 points, or 0.06 %, at 12,575.94.
With overall valuations now at extremely high levels, some investors worry stocks could be more vulnerable to any bad news such as unexpected setbacks in the roll-out of coronavirus vaccines or delays in stimulus.
Major U.S. banks Goldman Sachs Group Inc and Morgan Stanley Inc jumped nearly 2%, while travel stocks, which have been battered by the pandemic, also clocked sharp gains.
Delta Air Lines Inc and American Airlines Group Inc climbed 2.4% and 3.1%.
Home improvement chain Lowe's Cos Inc jumped 4.9% and was among the top percentage gainers on the benchmark S&P 500 after announcing a new $15 billion share repurchase plan.
Advancing issues outnumbered decliners 2.2-to-1 on the NYSE and 1.5-to-1 on the Nasdaq.
The S&P 500 posted 30 new 52-week highs and no new low, while the Nasdaq recorded 330 new highs and four new lows.
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