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Dow on Track to Finish Best Month in Over Three Decades

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U.S. stocks are on track to complete a banner November, giving the Dow Jones Industrial Average its best month in over 33 years, as investors cheer the prospect of Covid-19 vaccines halting the pandemic and fresh stimulus spending to bolster the economy.

Futures tied to the Dow ticked down 0.4% Monday, signaling that the blue-chips index will enter the final trading session of November down about 140 points. The benchmark was up roughly 12.9% month-to-date by the end of Friday.

Contracts linked to the S&P 500 slipped 0.2% at the start of the week, though the broad index remains on track for what may be its biggest one-month advance since April. Futures for the Nasdaq-100 index edged up 0.1%, suggesting technology stocks will outperform.

Stocks have soared in November, at one point pushing the Dow over 30000 for the first time and putting the benchmark on course for potentially its biggest one-month advance since January 1987. Shares in companies that had suffered most from the pandemic, such as energy producers and banks, have posted steep gains.

The Russell 2000 index of small-cap stocks is also on pace for its best month in data going back to 1987.

Two main factors have fueled the latest leg up in markets, according to investors. The development of three vaccines in the West has opened up the possibility that the economic disruption caused by the coronavirus will end in 2021. Signs that President-elect Joe Biden will make a relatively smooth transition into the White House have doused some of the political uncertainty that had fed into heightened market volatility in the fall.

Ahead of the bell in New York, Moderna jumped over 13%. The drugmaker said it would ask U.S. and European health regulators on Monday to authorize use of the company’s Covid-19 vaccine.

Shares in
IHS Markit
rose more than 7% in premarket trading after the data provider said it would combine with S&P Global in a deal that values IHS Markit at $44 billion, including debt. The all-stock deal is the largest of the year.

The looming rollout of vaccines is likely to keep stocks on an upward trajectory in the final weeks of the year, investors and analysts said.

The surge of coronavirus infections in the U.S. and the possibility for logistical hiccups in the distribution of the shots could lead to bouts of selling. Still, money managers expect investors to view any declines as a buying opportunity.

“We’ve got a lot of very good vaccine news,” said Daniel Morris, chief market strategist at BNP Paribas Asset Management. “We should, for the most part, move up between now and the end of the year, with a chance for a setback here or there.

The Dow Jones Industrial Average reached a milestone of 30000. WSJ’s Jason Bellini explains how we got here and what the 30000 figure tells us about the state of the stock market. Photo: NYSE[object Object]

One risk for stocks in the coming months stems from exuberance among individual investors, said Trevor Greetham, head of multi asset at Royal London Asset Management, pointing to surveys by the American Association of Individual Investors. Still, the U.K. asset manager is betting that a revival in economic activity will continue to buoy stock prices in 2021.

The prospect of vaccines offers “some light at the end of the tunnel as an investor,” Mr. Greetham said. “If you’re buying stocks, you’re not just assessing the next month or two—you’re assessing the next 20 years.”

In bond markets, the yield on 10-year Treasurys ticked up to 0.855%, from 0.841% on Friday.

Bitcoin extended its volatile run, rising around 6% to $19,318. The digital currency’s runup in recent weeks has been driven by a new group of buyers seeking the opportunity for big profits.

Brent-crude futures were almost flat at $48.26 a barrel. Ministers from the Organization of the Petroleum Exporting Countries and its allies will make a decision on whether to go ahead with plans to boost to production in January at meetings Monday and Tuesday.

Traders broadly expect the cartel to extend output curbs into 2021 to bolster prices amid surging virus cases in the U.S. and restrictions on travel in Europe.

In Asia, investors were rattled by a Reuters report that the Trump administration is poised to add oil producer Cnooc and chip maker
Semiconductor Manufacturing International
to a blacklist of alleged Chinese military companies. Cnooc shares tumbled 14% in Hong Kong, while SMIC’s Hong Kong-listed stock fell 2.7%.

Most major markets in the region ended lower. Hong Kong’s Hang Seng lost 2.1%, Japan’s Nikkei 225 retreated 0.8% and the Shanghai Composite Index lost 0.5%.

Markets are concerned about more restrictions from the U.S. on investing in Chinese companies, according to Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong.

“Some investors would rather stay on the sidelines awaiting more clarity on vaccine developments and U.S. policy directions as the nation transits to new leadership,” Mr. Leung said.

Oil prices slid Monday as investors await a decision from OPEC members and their allies about extending production cuts.

Oil prices slid Monday as investors await a decision from OPEC members and their allies about extending production cuts.

Photo: Andrey Rudakov/Bloomberg News

Banks and energy producers dropped in Europe, weighing on the Stoxx Europe 600, which edged up 0.1%. Shares in
UniCredit
fell almost 4% on reports that the board was holding talks about governance at the Italian bank.

Write to Joe Wallace at Joe.Wallace@wsj.com