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A potential breakthrough on an experimental vaccine for COVID-19 lifted the S&P 500 and Nasdaq overnight, priming the ASX for a positive start.  

SPI200 index futures rallied 42 points or 0.7 per cent after Pfizer released promising results from an early-stage human trial.

The S&P/ASX 200 has a third day of gains in its sights after rising 1.4 per cent on Tuesday and 0.6 per cent yesterday to 5934. The benchmark index dropped below 6000 on June 11 and has struggled to break back through in three weeks of trading.

Pfizer’s announcement helped keep the S&P 500 and Nasdaq above water as the number of new coronavirus cases in the US continued to rise. The S&P 500 advanced 16 points or 0.5 per cent. The Nasdaq climbed 96 points or 0.95 per cent to a new record close. The Dow declined 78 points or 0.3 per cent as a 3.2 per cent rise in Pfizer was outweighed by retreats among more than two-thirds of the index’s components.

Pfizer took the unusual step of publishing without peer review results from a Phase 1/2 clinical trial of a vaccine candidate developed with BioNTech. The study showed all 24 participants in the trial who received a lower dose of the experimental vaccine developed neutralising antibodies up to 2.8 times higher than in recovered COVID-19 patients. If the data pass peer review, a much wider Phase 2b/3 trial could begin as soon as this month. Pfizer said it could manufacture up 100 million doses by the end of the year.

“This is highly unlike Pfizer,” CNBC’s Jim Cramer said. “I, frankly, don’t want to accept it like this, but the market will and it’s kind of a saved-by-Pfizer market from where we were.”

The vaccine news helped steady nerves as Arizona and New Jersey joined the growing list of US states that have either paused or wound back reopening plans. A 40 per cent increase in the average number of new coronavirus cases over the last week has prompted at least 12 states to hit pause or rewind.

Market sentiment was bolstered by evidence of economic recovery. A measure of factory activity jumped to 52.6 last month from 43.1 in May, indicating activity expanded for the first time in four months. A separate report showed private-sector employment figures for May were not as bad as first reported. ADP revised its May tally from a loss of 2.8 million jobs to a gain of 3.1 million. June figures showed the private sector created 2.4 million jobs. The official June employment report will be released tonight, the last trading day before Friday’s July 4 US public holiday.

The night’s gains had a defensive bias, with real estate, utilities and communications the best-performing sectors with advances of at least 2.2 per cent. The energy sector fell 2.5 per cent, financials 1 per cent and industrials 0.5 per cent. The Dow was weighed down by declines in Exxon Mobil, Chevron, IBM, Intel and Walgreens Boots Alliance.

BHP’s US-listed stock fell 0.56 per cent and its UK-listed stock 1.61 per cent. Rio Tinto gave up 0.36 per cent in the US and 2.22 per cent in the UK. The spot price for iron ore landed in China eased 30 cents or 0.3 per cent to US$100.75 a dry ton.

Oil was boosted by news of the largest weekly drawdown on US stockpiles of the year. Brent crude settled 76 cents or 1.8 per cent ahead at US$42.03 a barrel after the Energy Information Administration reported US inventories declined by 7.2 million barrels last week, breaking a run of three consecutive rises.

Gold fell back from its highest level in almost nine years. Gold for August delivery retreated $20.60 or 1.1 per cent to settle at US$1,779.90 an ounce after trading as high as US$1,807.70, a level last seen in September 2011.

Copper claimed a five-month high after Chinese factory data recorded the biggest increase since December. Benchmark copper on the London Metal Exchange climbed 0.8 per cent to US$6,050.75 a tonne. Nickel edged up 0.3 per cent and tin 0.2 per cent. Aluminium dropped 0.1 per cent, lead 0.4 per cent and zinc 0.3 per cent.

The dollar was steady at 69.15 US cents.

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