NEW YORK — The Dow Jones Industrial Average broke through 30,000 points Tuesday as investors were encouraged by the latest progress on developing coronavirus vaccines and news that the transition of power in the U.S. to President-elect Joe Biden will finally begin.
Traders were also encouraged to see that Biden had selected Janet Yellen, a widely respected former Federal Reserve chair, as treasury secretary.
The Dow rose 454 points, or 1.5%, to close at 30,046. The S&P 500 index, which has a far greater impact on 401(k) accounts than the Dow does, rose 1.6%. Treasury yields rose as investors became more optimistic about the economy.
The gains extend a monthlong market rally driven by growing optimism that development of coronavirus vaccines and treatments will loosen the pandemic’s stranglehold on the economy. They also mark a rapid climb for the Dow from its March 23 low of just under 18,600 during the worst of its early pandemic nosedive.
“We are one step closer to moving past the election uncertainty,” said Lindsey Bell, chief investment strategist at Ally Invest. “People are still optimistic about what 2021 has to bring, from an economic perspective and an earnings perspective.”
“There’s some relief that Biden is choosing moderates to fill out the cabinet,” said Barry Bannister, head of institutional equity strategy at Stifel. Bannister also said the encouraging vaccine news continues to give hope that there is an end in sight to the pandemic.
Stocks have been pushing higher this month, driving the S&P 500 up by more than 10%, as investors have grown more hopeful that the development of coronavirus vaccines and treatments will help pave the way for the economy recover next year.
The latest vaccine developments are also tempering lingering concerns over rising virus cases in the U.S., as well as in Asia and other parts of the world, and new government restrictions on businesses aimed at limiting the spread.
