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US open: Mixed start to trading amid vaccine optimism

By Iain Gilbert

Date: Tuesday 11 Aug 2020

US open: Mixed start to trading amid vaccine optimism

(Sharecast News) - Wall Street trading started with mixed results after the bell on Tuesday after Russia gave regulatory approval for the world's first Covid-19 vaccine.
As of 1540 BST, the Dow Jones Industrial Average was up 1.20% at 28,124.52 and the S&P 500 was 0.36% firmer at 3,372.67, while the Nasdaq Composite started out the session 0.45% weaker at 10,918.59.

The Dow opened 333.08 points higher on Tuesday, carrying on gains recorded in the previous session after Donald Trump signed an executive order extending the nation's Covid-19 unemployment relief programme.

The Dow and S&P 500 rallied higher shortly after Russian President Vladimir Putin claimed the nation had granted regulatory approval for the world's first Covid-19 vaccine.

While concerns about how quickly Russia had managed to develop a safe vaccine abounded, the announcement left market participants optimistic about the race for an inoculation.

Stocks poised to benefit from an economic reopening such as American Airlines, Norwegian Cruise Lines and mall-owner Simon Property Group were all higher in early trading, while the tech-heavy Nasdaq slumped as a result of a rotation out of the sector.

The possibility of capital gains tax cuts also lifted sentiment, with focus looking set to shift back to the prospect of more US stimulus payments and geopolitical tensions as earnings season comes to a close.

SpreadEx's Connor Campbell said: "In one of those sessions that seems to fly in the face of the most recent string of headlines, the Western markets rallied hard on Tuesday.

"Flip-flopping between being the market's worst nightmare and its white knight, Donald Trump donned the latter outfit on Monday and Tuesday, lifting indices higher first with an executive order for Covid-19 relief, and then the claim he is 'seriously' considering a capital gains tax cut."

On the macro front, small business sentiment in the US deteriorated in July as coronavirus cases rose, according to the latest survey from the National Federation of Independent Business. The small business optimism index fell to 98.8 from 100.6 in June, missing expectations for a reading of 105.9.

NFIB chief economist Bill Dunkelberg said: "This summer has been challenging for many small business owners who are working hard to keep their doors open and remain in business."

Elsewhere, US producer prices increased more in July than in the last 18 months, according to the Labor Department, with the producer price index for final demand rising 0.6% last month, driven by a surge in portfolio management fees and rising costs for gasoline.

Still to come, Federal Reserve Bank of San Francisco head Mary Daly will deliver a speech at 1700 BST.

In corporate news, Eastman Kodak shares slumped overnight after a US federal agency stated it was now reviewing a previously announced $765m loan to assist the photography outfit in producing drug ingredients following recent allegations of wrongdoing.

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