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European stocks slide as surge in virus cases hits rebound hopes

(Reuters) – European stocks fell on Friday after gaining ground during the week as a surge in U.S. coronavirus cases made investors less optimistic about prospects for a rebound in the global economy.

After opening largely flat, the pan-European STOXX 600 index lost ground as the session wore on, with personal & household goods makers .SXQP, miners .SXPP, automakers .SXAP and banks .SX7P leading declines.

The benchmark index closed down 0.8%, with trading volumes thin because of a U.S. market holiday. The index logged a 2% weekly gain.

Hopes of a COVID-19 vaccine and signs of the global economy recovering from the health crisis supported markets this week, but investors have become less optimistic about further gains as the United States set a new daily global record for COVID-19 cases on Thursday.

“The fear of another big(ger) drop in equity prices continues to haunt financial markets. The opportunity to engage in European assets also seems a bit limited,” Thomas Flury, head of FX Strategies at UBS Global Wealth Management wrote to clients.

“For this, clearer signs of a recovery in international trade should be visible. The data on this is constructive, but not surprising to the upside.”

A private survey showed that China’s services sector expanded at the fastest pace in over a decade in June as the easing of lockdown measures revived consumer demand, though companies continued to shed jobs.

A final reading of euro zone business activity showed a coronavirus-inflicted plunge eased sharply last month as more businesses reopened and people ventured out.

But there are doubts about the pace of the recovery with some countries in Europe reimposing restrictions due to a surge in COVID-19 cases.

In France, President Emmanuel Macron named Jean Castex, a top civil servant and local mayor who orchestrated the country’s coronavirus lockdown exit strategy, as his new prime minister as he acted to win back voters. France’s CAC 40 .FCHI ended down 0.8%, in-line with the broader markets.

Among individual movers, Germany’s Delivery Hero (DHER.DE) rose 4.7% after the takeaway food company said its order growth nearly doubled in the second quarter.

France’s utility firm EDF (EDF.PA) jumped 5.6% after it revised upwards its 2020 nuclear output target.

UK retailer Next (NXT.L) fell 4.6% after Goldman Sachs downgraded the stock to “sell”, while Primark-owner AB Foods (ABF.L) slipped 0.9% after the U.S. bank downgraded its stock to “neutral”.

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Business

Wall Street shifts bets to big pharma as COVID-19 vaccine race progresses

(Reuters) – Wall Street is moving some bets on COVID-19 vaccines to large pharmaceutical companies with robust manufacturing capabilities, signaling that a love affair with small biotech firms might be ending after the sector’s best quarter in almost 20 years.

Early signs of the shift came Wednesday, when positive data for one of Pfizer Inc’s (PFE.N) COVID-19 vaccine candidates sent shares of the large U.S. drugmaker up more than 3%. Shares of its partner on the vaccine, Germany’s BioNTech SE (22UAy.F), have been flat on the data.

Although the news had little effect on shares of Pfizer’s large rivals in the vaccine race, smaller peers Moderna Inc (MRNA.O) and Inovio Pharmaceuticals Inc (INO.O), both of which have previously shown promising COVID-19 data of their own, ended down more than 4% and 25%, respectively. Inovio partially rebounded Thursday.

For the week so far, shares of bigger players in the vaccine race, such as Johnson & Johnson (JNJ.N) and Merck (MRK.N), have also outperformed Inovio and Moderna.

Some of the selling was likely driven by end-of-quarter profit-taking, locking in dizzying gains in an otherwise turbulent market. Moderna and Inovio shares have risen nearly 200 percent and 540 percent in the year-to-date, respectively, greatly eclipsing gains for large pharmaceutical companies.

Analysts say investors are changing their strategy to focus on companies that can make, as well as discover, a vaccine and that the risk reward profile for some biotechs is less favorable after their stunning gains so far this year.

“I would certainly say success by Pfizer, AstraZeneca, or Johnson & Johnson could make it more challenging for smaller companies, given size and scale and manufacturing capability,” said Vamil Divan, a biotechnology analyst at Mizuho.

Smaller biotechnology companies with promising COVID-19 vaccines pose a special challenge for investors, said Justin Onuekwusi, a portfolio manager at Legal & General Group Plc.

Because of their limited manufacturing capabilities, investors in those stocks are effectively betting that the company or its drug will be bought by larger companies, he said.

“In smaller cap stocks like biotech, it all tends to be quite binary so fundamental or detailed analysis don’t always work,” Onuekwusi said.

Medical manufacturers have never faced a challenge like that of producing a global COVID-19 vaccine.

Companies including Pfizer and Johnson & Johnson have said they each aim to produce as many as 1 billion doses by the end of 2021.

There are more than 17 vaccine candidates being tested on humans in a frantic global race to end a pandemic that has infected 10 million people and killed more than half a million. Drugmakers have released early stage human trial data for five vaccine candidates so far.

Bernstein Research analyst Vincent Chen said COVID-19 vaccines could generate in excess of $10 billion in annual revenue, but many investors are struggling to determine their value.

“In the near term, they are not going make a ton of money on” the vaccines, said Evan Seigerman, an analyst at Credit Suisse. “The initial round of vaccines are going to be given away or sold at cost. Where people will start making money is if COVID-19 vaccine becomes something like the flu shot and people need to constantly protect against it.”

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Business

Wall Street closes higher after biggest payrolls jump on record

NEW YORK (Reuters) – Wall Street closed higher and the Nasdaq reached an all-time closing high on Thursday as investors headed into their long holiday weekend buoyed by a record surge in payrolls, which provided assurance that the U.S. economic recovery was well under way.

All three major U.S. stock averages advanced, with the benchmark S&P 500 posting its fourth straight daily gain.

Massive stimulus and hopes for a speedy economic rebound have returned the S&P 500 and the Dow to 7.6% and 12.6% below their record highs reached in February.

The indexes registered strong gains for the week.

The U.S. economy added 4.8 million jobs USNFAR=ECI in June according to the Labor Department, 1.8 million more than analysts expected, setting a second consecutive record.

Massive rehiring sent the unemployment rate USUNR=ECI down to 11.1%. [nL1N2E82LC]

“There was a lot to like in economic data for the week,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “And there’s still talk that there will be more stimulus from Washington after they get back from the Fourth of July break.”

Still, even with May and June’s consecutive record payroll gains, the labor market has still recovered only a fraction of the 22 million jobs lost in the March-April plunge.

The recovery of the U.S. economy, now in its sixth month of recession, could stall as new cases of COVID-19 hit record levels and several states hit hardest by the resurgence halted or reversed plans to reopen their economies. [nL1N2E81ES]

On Thursday, Florida reported a record-shattering 10,000 new cases of the disease, worse than any European country reported at the peak of their outbreaks. [nL8N2E94GS]

“With the spikes (in new COVID-19 cases) we’ve seen the larger states – Texas, California and Florida – those states have taken steps to turn back their re-opening plans,” Nolte added. “And that will slow the overall growth and consumer spending in those regions.”

In the coming weeks, market participants will train their focus on second-quarter reporting season. In aggregate, analysts now expect S&P earnings to have dropped by 43.1% as companies grappled with plunging demand and disrupted supply chains.

The Dow Jones Industrial Average .DJI rose 92.39 points, or 0.36%, to 25,827.36, the S&P 500 .SPX gained 14.15 points, or 0.45%, to 3,130.01 and the Nasdaq Composite .IXIC added 53.00 points, or 0.52%, to 10,207.63.

The CBOE Volatility index , a barometer of investor anxiety, logged its largest weekly point drop since the week ending May 8.

Of the 11 major sectors in the S&P 500, all but real estate .SPLRCR and communications services .SPLRCL closed higher, with materials .SPLRCM enjoying the largest percentage gain.

Microsoft Corp (MSFT.O) provided the biggest boost to the S&P 500, and in June retained its top spot as the most globally invested stock, according to data from trading platform eToro.

Tesla Inc (TSLA.O) jumped 8.0% after the electric car maker’s second-quarter vehicle deliveries beat Wall Street estimates. [nL4N2E92OP]

Advancing issues outnumbered declining ones on the NYSE by a 1.90-to-1 ratio; on the Nasdaq, a 1.28-to-1 ratio favored advancers.

The S&P 500 posted 36 new 52-week highs and no new lows; the Nasdaq Composite recorded 123 new highs and 10 new lows.

Volume on U.S. exchanges was 10.03 billion shares, compared with the 13.24 billion average over the last 20 trading days.

(This story corrects index that has recovered since February to the Dow instead of the Nasdaq, paragraph three)

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Business

Record job growth powers Wall Street, Nasdaq hits all-time high

(Reuters) – Wall Street opened higher on Thursday, with the Nasdaq hitting an all-time high as data showed the U.S. economy added jobs at a record pace in June, the latest signal of a rebound in business activity following the easing of coronavirus-led lockdowns.

Nonfarm payrolls rose by 4.8 million jobs in June, the Labor Department’s closely watched monthly employment data showed, the most since the government began keeping records in 1939, although a recent surge in COVID-19 cases has threatened the fledgling recovery.

All 11 major S&P sectors were trading higher and gains were led by financials, basic materials and energy stocks.

“The strong rebound would normally be an unambiguously positive sign that a recovery is under way (but) it is being accompanied by a sharp rise in new infections, which was what caused the collapse in the first place,” said Mike Bell, global market strategist at JP Morgan Asset Management in London.

“It is therefore too soon to say for certain that this recovery in employment sounds the all-clear for investors.”

Several states are scaling back or pausing reopenings to tackle the spike in infections and analysts have warned of another selloff in financial markets if the damage to Corporate America mounts.

Third-quarter earnings for S&P 500 companies are now expected to tumble 25%, compared with a forecast of a 2.7% drop on April 1, according to Refinitiv data. In the second quarter, earnings are forecast to have plunged 43%.

“People are less concerned about earnings than they are about the guidance and what companies say about the next six months and 2021,” said Thomas Hayes, managing member at Great Hill Capital Llc in New York.

At 10:10 a.m. ET, the Dow Jones Industrial Average was up 431.49 points, or 1.68%, at 26,166.46, the S&P 500 was up 46.08 points, or 1.48%, at 3,161.94, and the Nasdaq Composite was up 147.27 points, or 1.45%, at 10,301.90.

Tesla Inc jumped 8.5% and was set for a fourth straight session of gains after beating Wall Street estimates for second-quarter vehicle deliveries.

Travel-related stocks were also among the biggest gainers, with cruise line operators Carnival Corp, Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings Ltd rising more than 2%.

Coty Inc added 5.3% after it named former top executive of L’Oreal, Sue Nabi, as its chief executive officer.

Advancing issues outnumbered decliners more than 8-to-1 on the NYSE and 3-to-1 on the Nasdaq.

The S&P index recorded 30 new 52-week highs and no new low, while the Nasdaq recorded 84 new highs and six new lows.

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Business

European stocks surge as cyclicals rally, U.S. jobs data awaited

(Reuters) – European shares climbed on Thursday as encouraging economic data from across the globe and hopes of a COVID-19 vaccine lifted sentiment ahead of the crucial U.S. jobs data.

The pan-European STOXX 600 rose 1.2% to mark its fourth consecutive day of gains. Banks .SX7P, automakers .SXAP and travel & leisure .SXTP firms were the top gainers, jumping between 2.7% and 3.4%.

Financial markets entered the second half of the year on a cheerful note earlier this week, as business surveys showed a coronavirus-induced slump in global manufacturing eased in June.

Adding to optimism, a COVID-19 vaccine developed by German biotech firm BioNTech (BNTX.O) and U.S. pharmaceutical giant Pfizer (PFE.N) was found to be well-tolerated in early stage human trials.

All eyes are on the U.S. payrolls data, due at 1230 pm GMT. Economists have estimated that job numbers rose by 3 million in June, rebounding further after a historic 20.69 million plunge in April.

However, a spike in U.S. infections fuelled uncertainty.

New U.S. cases of COVID-19 jumped nearly 50,000 on Wednesday, according to a Reuters tally, marking the biggest one-day rise since the start of the pandemic.

“Given the ongoing threat from stubbornly rising infection numbers in key U.S. states, there seems to be little potential for the labour market report to produce a distinct upward push to the general market sentiment, as it did four weeks ago,” UniCredit analysts wrote in a note.

The end of the lockdown failed to bring a surge in employment in Spain as data showed that the 900,000 jobs lost at the peak of the pandemic had not been regained.

Among individual movers, Associated British Foods (ABF.L) jumped 7.3% after saying trading in its Primark fashion stores that reopened after the lockdown has been “reassuring and encouraging”.

German fashion house Hugo Boss (BOSSn.DE) rose 2.6% after it appointed Tommy Hilfiger executive Oliver Timm as its chief sales officer.

Scandal-hit Wirecard (WDIG.DE) slumped 27.1% after police and public prosecutors raided its headquarters in Munich and four properties in Germany and Austria.

Cardboard maker DS Smith (SMDS.L) fell 7.3% after saying it was too early to resume dividends in the short-term due to market uncertainty caused by the pandemic.

Dutch construction company BAM Groep (BAMN.AS) dropped 11.6% as it warned of a “significant” loss in the first half of the year.

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S&P, Nasdaq close higher on vaccine hopes, improving data

NEW YORK (Reuters) – The S&P 500 and Nasdaq indexes closed higher on Wednesday to kick off the third quarter as increasing optimism for a safe and effective COVID-19 vaccine eased concerns that another round of business lockdowns was likely.

Pfizer Inc’s shares rose more than 3% after the drugmaker said a COVID-19 vaccine being developed with German biotech firm BioNTech showed promise and was found to be well-tolerated in early-stage human trials.

The gains put Pfizer among the top boosts to both the S&P 500 and Dow Industrials while helping improve the mood on Wall Street even as the U.S. Centers for Disease Control and Prevention reported an increase of 43,644 new cases of the coronavirus. U.S.-listed shares of BioNTech rose as much as 18.9% before fading into the close, ending down 3.9%.

“Pfizer news was certainly an impetus for the market to move even higher but in general it is this very positive momentum, looking beyond this re-spreading of the virus, looking beyond that to eventual treatments, eventual vaccine and eventual safe openings of the economy,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Investors were also encouraged by some upbeat economic data as coronavirus-induced lockdowns have eased. A report on Wednesday showed a slump in global manufacturing had ebbed in June, with U.S. figures hitting their highest level in more than a year.

On Thursday, all eyes will be on the Labor Department’s nonfarm payrolls report.

The Dow Jones Industrial Average fell 77.91 points, or 0.3%, to 25,734.97, the S&P 500 gained 15.57 points, or 0.50%, to 3,115.86 and the Nasdaq Composite added 95.86 points, or 0.95%, to 10,154.63.

The Dow was held in check partly by a 1.6% fall in Boeing Co shares, which lost ground for a second straight day following a 14% surge on Monday.

Updates on the progress in various COVID-19 vaccine programs are being closely watched by investors, and have been partly responsible for Wall Street’s recent rally.

The S&P 500 closed its best quarter since 1998 on Tuesday, fueled also by unprecedented levels of fiscal and monetary stimulus. Minutes from the Federal Reserve’s June policy meeting showed policymakers broadly agreed to make full use of the tools at the central bank’s disposal to support a recovery from the recession triggered by the coronavirus pandemic.

The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 52.6 last month from 43.1 in May, ending three straight months of contraction, or readings below 50.

The ADP National Employment Report on Wednesday showed U.S. private payrolls increased by 2.369 million jobs, but still less than expected in June.

FedEx Corp jumped 11.7% after posting better-than-expected quarterly profit and revenue, helped by a surge in pandemic-fueled home deliveries.

Drugmaker Amgen Inc climbed 8.2% after a federal appeals court upheld two patents for the drugmaker’s multibillion-dollar rheumatoid arthritis drug Enbrel.

Advancing issues outnumbered declining ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored decliners.

The S&P 500 posted 18 new 52-week highs and no new lows; the Nasdaq Composite recorded 83 new highs and 11 new lows.

Volume on U.S. exchanges was 10.57 billion shares, compared with the 13.46 billion average for the full session over the last 20 trading days.

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S&P, Nasdaq close higher on vaccine hopes, improving data

NEW YORK (Reuters) – The S&P 500 and Nasdaq indexes closed higher on Wednesday to kick off the third quarter as increasing optimism for a safe and effective COVID-19 vaccine eased concerns that another round of business lockdowns was likely.

Pfizer Inc’s shares rose more than 3% after the drugmaker said a COVID-19 vaccine being developed with German biotech firm BioNTech showed promise and was found to be well-tolerated in early-stage human trials.

The gains put Pfizer among the top boosts to both the S&P 500 and Dow Industrials while helping improve the mood on Wall Street even as the U.S. Centers for Disease Control and Prevention reported an increase of 43,644 new cases of the coronavirus. U.S.-listed shares of BioNTech rose as much as 18.9% before fading into the close, ending down 3.9%.

“Pfizer news was certainly an impetus for the market to move even higher but in general it is this very positive momentum, looking beyond this re-spreading of the virus, looking beyond that to eventual treatments, eventual vaccine and eventual safe openings of the economy,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

Investors were also encouraged by some upbeat economic data as coronavirus-induced lockdowns have eased. A report on Wednesday showed a slump in global manufacturing had ebbed in June, with U.S. figures hitting their highest level in more than a year.

On Thursday, all eyes will be on the Labor Department’s nonfarm payrolls report.

The Dow Jones Industrial Average fell 77.91 points, or 0.3%, to 25,734.97, the S&P 500 gained 15.57 points, or 0.50%, to 3,115.86 and the Nasdaq Composite added 95.86 points, or 0.95%, to 10,154.63.

The Dow was held in check partly by a 1.6% fall in Boeing Co shares, which lost ground for a second straight day following a 14% surge on Monday.

Updates on the progress in various COVID-19 vaccine programs are being closely watched by investors, and have been partly responsible for Wall Street’s recent rally.

The S&P 500 closed its best quarter since 1998 on Tuesday, fueled also by unprecedented levels of fiscal and monetary stimulus. Minutes from the Federal Reserve’s June policy meeting showed policymakers broadly agreed to make full use of the tools at the central bank’s disposal to support a recovery from the recession triggered by the coronavirus pandemic.

The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 52.6 last month from 43.1 in May, ending three straight months of contraction, or readings below 50.

The ADP National Employment Report on Wednesday showed U.S. private payrolls increased by 2.369 million jobs, but still less than expected in June.

FedEx Corp jumped 11.7% after posting better-than-expected quarterly profit and revenue, helped by a surge in pandemic-fueled home deliveries.

Drugmaker Amgen Inc climbed 8.2% after a federal appeals court upheld two patents for the drugmaker’s multibillion-dollar rheumatoid arthritis drug Enbrel.

Advancing issues outnumbered declining ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.19-to-1 ratio favored decliners.

The S&P 500 posted 18 new 52-week highs and no new lows; the Nasdaq Composite recorded 83 new highs and 11 new lows.

Volume on U.S. exchanges was 10.57 billion shares, compared with the 13.46 billion average for the full session over the last 20 trading days.

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European stocks end choppy session higher on vaccine hopes

(Reuters) – Hopes of a COVID-19 vaccine pulled European stocks from losses earlier on Wednesday, after fears of a no-deal Brexit and anxieties relating to the European Union’s recovery fund had weighed on sentiment.

Ending a choppy session, the pan-European STOXX 600 index rose 0.2%, with blue-chip indexes in Paris .FCHI, Milan .FTMIB and London .FTSE down about 0.2%

Markets on both sides of the Atlantic got a boost as a COVID-19 vaccine developed by Pfizer Inc (PFE.N) and German biotech firm BioNTech (BNTX.O) showed promise and was found to be well tolerated in early-stage human trials.

A series of business surveys released earlier showed broad improvements in manufacturing across Europe and Asia as economies opened up, with IHS Markit’s final euro zone Manufacturing Purchasing Managers’ Index (PMI) moving closer to the 50-mark separating growth from contraction in June.

Improving economic data out of the United States also buoyed sentiment.

“The coronavirus vaccine news coupled with ADP datapoint are acting as positive catalysts, lifting investor sentiment,” said Stephane Ekolo, a strategist at TFS Derivatives.

The STOXX 600 shed more than 1% in afternoon trading as German Chancellor Angela Merkel warned that there was a possibility that no deal would be agreed between the European Union and Britain, with “very limited” progress made in negotiations about their future relationship.

This comes as rating agency S&P Global cut its UK forecasts for the year again and warned of a possible “perfect storm” formed by a second wave of coronavirus infections and a no-deal Brexit.

Investors were also anxious about the European Union member states approving a 750 billion euro recovery fund at a summit later this month.

Morning trading in some European markets, including Germany’s DAX .GDAXI and Austria .ATX, was hit by a “technical issue” with the Frankfurt-based cash market system Xetra, exchange operator Deutsche Boerse (DB1Gn.DE) said.

After a nearly three-hour outage, the DAX was down 0.4% and the Austrian index rose 0.3%.

Among individual stocks, Swiss speciality chemicals maker Clariant (CLN.S) jumped 7% as it completed the $1.6 billion sale of its masterbatches unit to PolyOne Corp (POL.N), allowing the payment of a special dividend amounting to $3 per share.

Energy firms such as BP (BP.L) and Royal Dutch Shell (RDSa.L) rebounded from losses in the previous session as oil prices rose after a report showed U.S. crude stockpiles posted a bigger drop than expected. [O/R]

Travel & leisure stocks .SXTP were the top gainers.

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S&P, Nasdaq higher on vaccine hopes, improving economic data

(Reuters) – The S&P 500 and Nasdaq rose on Wednesday as rising hopes of a COVID-19 vaccine offset fears of another round of lockdowns following a record surge in coronavirus cases in the United States.

A COVID-19 vaccine developed by Pfizer Inc and German biotech firm BioNTech showed promise and was found to be well tolerated in early-stage human trial, the companies said.

Pfizer’s shares rose 4.8% on the news, one of the biggest boost to the S&P 500 index, while BioNTech gained 3%, helping improve the mood on Wall Street after the United States registered 47,000 new coronavirus cases on Tuesday, the biggest one-day spike since the start of the pandemic.

Updates on the progress in various COVID-19 vaccine programs are being closely watched by investors, and have been partly responsible for Wall Street’s recent rally. The S&P 500 closed its best quarter since 1998 on Tuesday.

The market in general has reacted positively to these bits of news as they are all tied to the COVID situation, said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey. “The COVID-19 is the linchpin to the market right now.”

The S&P 500 on Tuesday secured its biggest quarterly percentage gain in more than two decades fueled by unprecedented levels of fiscal and monetary stimulus.

Investors have also focused on signs of an economic recovery with the easing of coronavirus-induced lockdowns. Data on Wednesday showed a slump in global manufacturing was easing in June, with U.S. figures hitting their highest level in more than a year.

The Institute for Supply Management (ISM) said its index of national factory activity jumped to a reading of 52.6 last month from 43.1 in May, ending three straight months of contraction, or readings below 50.

On Thursday, all eyes will be on the Labor Department’s nonfarm payrolls report.

“The manufacturing number adds a boost to investor confidence. And now the market is positioning itself in anticipation for tomorrow’s numbers,” Bakhos added.

The ADP National Employment Report on Wednesday showed U.S. private payrolls increased by 2.369 million jobs, but still less than expected in June.

At 11:43 a.m. ET the Dow Jones Industrial Average was down 19.88 points, or 0.08%, at 25,793.00, the S&P 500 was up 8.47 points, or 0.27%, at 3,108.76 and the Nasdaq Composite was up 56.63 points, or 0.56%, at 10,115.39.

Battered cruise line operators Norwegian Cruise Line Holdings Inc, Royal Caribbean Cruises Ltd and Carnival Corp rose between 3.6% and 6.0%.

Drugmaker Amgen Inc rose 5% after a federal appeals court upheld two patents for the drugmaker’s multibillion-dollar rheumatoid arthritis drug Enbrel.

FedEx Corp jumped 14.3% after posting better-than-expected quarterly profit and revenue, helped by a surge in pandemic-fueled home deliveries.

Declining issues nearly matched advancers on the NYSE and outnumbered them 1.46-to-1 on the Nasdaq.

The S&P index recorded 13 new 52-week highs and no new low, while the Nasdaq recorded 64 new highs and eight new lows.

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World News

European shares kick off new quarter with subdued gains

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

July 1 (Reuters) – European shares started the new quarter on a sombre tone on Wednesday, as surging U.S. coronavirus cases kept optimism in check ahead of a slew of economic data.

The pan-European STOXX 600 index rose 0.2% by 0718 GMT, after closing out its best quarterly gains since March 2015 in the previous session.

The German DAX gained 0.7% as data showed retail sales rose sharply in May, reflecting a rebound in private consumption after the country lifted coronavirus-inflicted restrictions.

Drugs and pesticides maker Bayer jumped 3.4%, providing the biggest boost.

German unemployment and U.S. manufacturing activity and private jobs data are all due later in the session.

A cautious tone prevailed across the global markets, as the United States on Tuesday recorded its biggest single-day spike since the pandemic began, dimming hopes that the economic pain had passed.

Swiss specialty chemicals maker Clariant gained 6.9% as it completed the $1.6 billion sale of its masterbatches unit to PolyOne Corp, allowing the payment of a special dividend amounting to $3 per share. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

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