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* Apple jumps on report of higher iPhone production in 2021
* Technology sector seen resilient through pandemic -
analyst
* Utilities and materials sectors among strongest performers
(Updates after close)
By Noel Randewich and Karen Pierog
Dec 15 (Reuters) - Wall Street showed signs of a Santa rally
on Tuesday, with the Nasdaq closing at a record high, helped by
optimism about a potential government stimulus to protect the
economy from the coronavirus pandemic.
Apple Inc AAPL.O was the top boost to all three U.S.
benchmarks, surging 5% to its highest since September after a
report said it plans to increase iPhone production by 30% in the
first half of 2021. The Russell 2000 index .RUT of smaller companies surged
about 2.4% to a record high. It was the strongest day since Nov.
24 for the S&P 500 and the Dow Jones Industrial Average.
Some investors viewed the recent spike in coronavirus
infections and deaths, along with a grim November employment
report, as an impetus for a quick deal on a COVID-19 stimulus
bill, with economically sensitive sectors such as consumer
discretionary .SPLRCD , materials .SPLRCM leading gains.
The S&P 500 utilities index .SPLRCU rose almost 2% and
logged its strongest one-day gain since early November.
"They have lagged, and you could see a little bit of
rotation of people looking for yield," said 6 Meridian Chief
Investment Officer Andrew Mies, referring to utilities stocks.
Broad gains across the stock market were a healthy sign,
Mies added.
U.S. House Speaker Nancy Pelosi invited top congressional
leaders to meet later on Tuesday in an effort to finalize a
massive government spending deal and reach an agreement on a new
package of coronavirus relief. The Fed is also expected to signal low-interest rates for
the foreseeable future in its two-day meeting starting Tuesday.
The recent coronavirus vaccine roll-out is expected to improve
the central bank's 2021 outlook. Unofficially, the Dow Jones Industrial Average .DJI rose
1.13% to end at 30,199.31 points, while the S&P 500 .SPX
gained 1.29% to 3,694.62.
The Nasdaq Composite .IXIC climbed 1.25% to end at
12,595.06, exceeding its previous record high close on Dec. 8.
Supported by Apple, the S&P 500 technology sector index
.SPLRCT rallied 1.6%. The sector has outperformed the broader
market during the pandemic and is up over 35% year to date, with
investors viewing it as resilient to virus-related disruptions.
"The market likes to go to tech when it is afraid the
economy may stall because of a rise in infections and
shutdowns," said Christopher Grisanti, chief equity strategist
at MAI Capital Management.
Increased liquidity and ultra-low lending rates have sent
investors flocking to stocks for during the COVID-19 pandemic,
while recent optimism over a vaccine pushed the S&P 500 to a
series of record highs last week.
"We have prices up and earnings down and we still have a
risk to the economy out there, so that's where the potential
challenge is," warned Mike O'Rourke, chief market strategist at
JonesTrading in Stamford, Connecticut. "Investors have to be
more tactical, look at more of that value space that probably
offers more opportunity as the recovery unfolds."
Eli Lilly and Co LLY.N jumped 6% after the company said it
would buy Prevail Therapeutics Inc PRVL.O in a deal
potentially valued at $1 billion to expand its presence in the
lucrative field of gene therapy. Prevail's shares surged 82%.
Moderna Inc's MRNA.O shares tumbled 5%, even after U.S.
Food and Drug Administration staff members did not raise any new
concerns over data on the drugmaker's COVID-19 vaccine. A report
said the vaccine will gain emergency use approval on Friday.
Advancing issues outnumbered declining ones on the NYSE by a
3.24-to-1 ratio; on Nasdaq, a 2.31-to-1 ratio favored advancers.
The S&P 500 posted 18 new 52-week highs and 2 new lows; the
Nasdaq Composite recorded 181 new highs and 19 new lows.
Volume on U.S. exchanges was 10 billion shares, compared
with the 11.5 billion average for the full session over the last
20 trading days.