US STOCKS-S&P 500 tops 3,000 on hopes of economic recovery, COVID-19 vaccine

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* Novavax jumps, to test vaccine candidate on humans
* Beaten down travel-related stocks surge
* Indexes up: Dow 2.47%, S&P 1.70%, Nasdaq 0.71%

(Adds details, quote; updates prices)
By Medha Singh and Uday Sampath Kumar
May 26 (Reuters) - U.S. stocks jumped and the S&P 500
breached 3,000 points on Tuesday as optimism about a potential
coronavirus vaccine and a revival in business activity helped
investors overlook simmering Sino-U.S. tensions.
The benchmark index traded above the key psychological level
for the first time since March 5, but came off session highs as
White House adviser Larry Kudlow said President Donald Trump was
"so miffed with China on virus and other matters that the trade
deal is not as important to him as it once was". Still, all 11 S&P sector indexes were trading higher, with
cyclical financials .SPSY , industrials .SPLRCI and energy
.SPNU stocks jumping between 3.5% and 5%.
The S&P 500 has risen about 37% from its March lows on a
raft of central bank and government stimulus and is now just
about 11% below its February record high.
On Monday, California decided to reopen in-store retail
businesses and places of worship from one of the most
restrictive shutdowns in the United States. "People have been locked up and when they see sparkles of
hope like vaccines, that drives optimism probably ahead of where
it should be and clearly ahead of the economy," said Richard
Steinberg, chief market strategist at Colony Group in Florida.
Data showed U.S. consumer confidence nudged up in May,
adding to hopes the worst of the impact of the shutdown in
economic activity was probably in the past. At 11:41 a.m. ET, the Dow Jones Industrial Average .DJI
was up 605.49 points, or 2.47%, at 25,070.65, the S&P 500 .SPX
was up 50.32 points, or 1.70%, at 3,005.77, and the Nasdaq
Composite .IXIC was up 66.52 points, or 0.71%, at 9,391.11.
U.S. biotech group Novavax Inc NVAX.O jumped 14.7% as it
joined the race to test coronavirus vaccine candidates on humans
and enrolled its first participants. Merck & Co Inc MRK.N
added 2.3% as it announced plans to develop two separate
vaccines. But with U.S. unemployment soaring beyond 14% and
macroeconomic data pointing at a deep recession, analysts warned
financial markets could be betting on too fast a recovery.
"The impact on the economy and corporate earnings will be
seen for several quarters (and) I'm not sure if it has been
completely baked into the equity prices," Robert Wyrick, chief
investment officer at Post Oak Private Wealth Advisors in
Houston, Texas told the Reuters Global Markets Forum.
Beaten down travel-related stocks soared, with S&P 1500
airlines index .SPCOMAIR up 10.8% and cruise operators
including Carnival Corp CCL.N more than 12.3%.
Advancing issues outnumbered decliners more than 6-to-1 on
the NYSE and 3-to-1 on the Nasdaq.
The S&P index recorded 13 new 52-week highs and no new low,
while the Nasdaq recorded 96 new highs and seven new lows.

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