European stocks and Dow futures gain on vaccine optimism and signs of orderly U.S. transition

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European stocks rose Tuesday, buoyed by optimism that vaccines will end the coronavirus pandemic as well as signs of an orderly transition in the U.S.

Though down 6% year-to-date, the Stoxx Europe 600 rose 0.7%. Investors again bid up prices of oil producers including Total and BP continuing a streak in which the Stoxx oil and gas sector has jumped 31% over the last month.

The German DAX , French CAC 40 and U.K. FTSE 100 each registered gains.

Futures on the Dow Jones Industrial Average rose 246 points after a 328-point gain for the blue chips on Monday. Futures on the Russell 2000 outperformed those of the Nasdaq 100 a sign of the preference for hard-hit small- and value stocks over the technology giants that have surged during the pandemic.

“The likely wide availability of a Covid-19 vaccine in the second half of 2021 underpins our expectation of a strong economic recovery next year following early weakness,” said Benedicte Lowe, cross-asset strateigst at BNP Paribas. “At the same time, monetary policy is likely to remain exceptionally accommodative. We expect this, along with an expansionary fiscal stance, to support economic activity.”

Election risk was further reduced as the head of the General Services Administration told the Biden team that the transition can formally begin, a move President Donald Trump endorsed in a tweet. President-elect Biden is expected to formally name Janet Yellen, the former Federal Reserve chair who presided over an era of low interest rates and stock-market gains, as his Treasury secretary nominee.

A sign of the optimism in markets came as catering company Compass Group rose 5% after reporting a 78% drop in fiscal year ending Sept. 30 adjusted earnings per share and didn’t pay a final dividend.

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