New York — The S&P 500 and Nasdaq Composite closed at record highs on Tuesday, with investors betting a Covid-19 vaccine will be available soon, and more confident about a speedy economic recovery after upbeat Chinese factory data.

Investors stayed focused on updates about a handful of vaccine candidates and the start of global shipments as drugmakers submit paperwork for regulatory approvals.

Pfizer jumped almost 3% after the drugmaker and Germany's BioNTech  sought emergency approval of their vaccine candidate from the European regulator.

The partners are neck-and-neck with rival Moderna, which also applied for emergency approval from the European regulator. Its stock tumbled nearly 8% from a record high the day before.

“There is this optimism about what it means as we see news about vaccines emerge,” said Bill Northey, senior investment director at US Bank Wealth Management in Minneapolis.

“As we look towards a health solution, we could be sitting on a coiled spring of economic activity, but it could take a while for it to be unleashed.”

Earlier in the day, global equities got a boost from data that showed China's factory activity in November increased at its fastest pace in a decade. Several other countries also reported sharp upticks in factory activity.

US data showed a recovery in manufacturing activity lost momentum in November.

All 11 S&P 500 sector indexes rose, with communication services up 2% and the leading gains.

In extended trade, Slack Technologies fell 1% after Salesforce.com agreed to buy the messaging app company in a $28bn deal. Salesforce fell 3.5%.

On Tuesday, investors also focused on remarks by US treasury secretary Steve Mnuchin and Federal Reserve chair Jerome Powell at the Senate banking committee, where they agreed on the need for more aid for small businesses.

Meanwhile, a bipartisan group of US legislators unveiled a $908bn Covid-19 relief bill aimed at breaking a months-long deadlock between Democrats and Republicans over new emergency assistance for small businesses, unemployed people, airlines and other industries during the pandemic.

The Dow Jones Industrial Average rose 0.63% to end at 29,823.92 points, while the S&P 500 gained 1.13% to 3,662.44. The Nasdaq Composite climbed 1.28% to 12,355.11.

All three main stock indexes gained more than 10% in November.

Zoom Video Communications slumped 15% after warning its gross margins would remain under pressure going into 2021.

Tesla rose 3% after S&P Dow Jones Indices said it would add one of Wall Street's most valuable companies to the S&P 500 index in one go on December 21, rather than in two tranches.

Micron Technology advanced 4.7% as the chipmaker increased its revenue, gross margin and earnings forecast for the first quarter.

Advancing issues outnumbered declining ones on the NYSE by a 2.45-to-1 ratio; on Nasdaq, a 1.38-to-1 ratio favoured advancers.


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