Wall Street rises on vaccine hopes, Goldman profit beat

Wall Street gained on Wednesday with the S&P 500 nearing its highest in more than four months following a strong quarterly showing by Goldman Sachs and promising early data for a potential COVID-19 vaccine.

The US lender jumped 2.9% as its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.

Morgan Stanley gained 2.0% and Bank of America 1.9% ahead of their results on Thursday, which would wrap up earnings from the big six US banks. The broader banking index climbed 2.7%.

Energy, industrials and financial stocks led gains among the major S&P sectors.

"Better-than-expected earnings help the mood because we're in an environment where expectations have gotten very low," said Stephen Lee, portfolio manager at Logan Capital Management in Newtown Square, Pennsylvania.

The three main US stock indexes have recouped most of their losses from the coronavirus-led slump, with a raft of stimulus measures and encouraging economic data lifting the S&P 500 to within 5% of its record high hit in February.

With the second-quarter earnings season now underway, investors are looking for annual forecasts from marquee companies for signs of the pace of the rebound in Corporate America.

Wall Street's fear gauge eased for the second straight day after spiking on Monday amid a record surge in US coronavirus cases.

"We're not surprised to see volatility on a day-to-day basis as investors balance between better-than-expected proven recovery, waiting to see earnings results, and how successfully this healthcare challenge is going to be managed," Lee said.

UnitedHealth Group Inc fell 2.3% after warning of rising costs later this year as Americans catch up on less urgent surgeries halted by the coronavirus pandemic.

Moderna Inc surged 17.8% to a record high after a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies, bolstering hopes the shot could prove effective in later stages of testing.

Travel-related stocks Carnival Corp, Royal Caribbean Cruises Ltd, Marriott International and Wynn Resorts rose between 4.6% and 8.2%, with the S&P 1500 airlines index up 5.5%.

At 9:38 a.m. ET, the Dow Jones Industrial Average was up 264.92 points, or 0.99%, at 26,907.51, the S&P 500 was up 25.78 points, or 0.81%, at 3,223.30, and the Nasdaq Composite was up 49.05 points, or 0.47%, at 10,537.62.

Apple rose 1.2% after Europe's second-top court rejected an EU order to the iPhone maker to pay 13 billion euros ($14.78 billion) in Irish back taxes.

Advancing issues outnumbered decliners 5.67-to-1 on the NYSE and 4.55-to-1 on the Nasdaq.

The S&P index recorded 18 new 52-week highs, while the Nasdaq recorded 32 new highs. Neither index recorded a new low.