US STOCKS-S&P boasts record close with earnings reports adding to vaccine fueled optimism

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* Cisco, Disney gain ground after quarterly reports
* Economically sensitive industries outperform growth
sectors
* President-elect Joe Biden solidifies win with state of
Georgia
* Biden aides talk targeted COVID restrictions vs national
lockdown
* Indexes up: Dow 1.37%, S&P 1.36%, Nasdaq 1.02%

(Updates closing numbers)
By Sinéad Carew
NEW YORK, Nov 13 (Reuters) - The S&P 500 notched a record
closing high on Friday with upbeat earnings reports helping to
drive optimism about the economy along with hopes for successful
COVID-19 vaccines, even as investors monitored a surge in virus
cases and restrictions around the country.
After a volatile trading week where the market was whipsawed
between hopes and fears around the virus, Cisco Systems Inc
CSCO.O provided the biggest boost to the S&P 500 after its
quarterly report showed a work-from-home driven surge in demand.
Walt Disney Co DIS.N also rose as its rapidly growing
streaming video business, and a partial recovery at its theme
parks tempered its quarterly loss. "At least for today it looks like sentiment regarding the
potential for vaccines combined with very strong earnings
announcements from a number of companies has investors hopeful
that the economy can continue to recover," said Michael Arone,
chief investment strategist at State Street Global Advisors.
The Dow Jones Industrial Average .DJI rose 399.64 points,
or 1.37%, to 29,479.81, the S&P 500 .SPX gained 48.14 points,
or 1.36%, to 3,585.15 and the Nasdaq Composite .IXIC added
119.70 points, or 1.02%, to 11,829.29.
Along with the S&P, the small cap Russell 2000 .RUT also
registered a record closing high on Friday, rising 2.1% on the
day.
Friday's outperformance of more economically sensitive
cyclical sectors including energy .SPNY , real estate .SPLRCR
and industrials .SPLRCI over growth sectors like technology
.SPLRCT was a clear indication of "optimism around the
economy" said Tom Martin, senior portfolio manager at Globalt
Investments in Atlanta.
The Russell 1000 value index .RLV , which is heavily
weighted toward cyclical sectors such as banks and energy, rose
1.97% on Friday while the growth index .RLG , with a large tech
company weighting, added 0.7%.
The three major U.S. stock indexes had fallen on Thursday as
more than a dozen U.S. states reported a doubling of new
COVID-19 cases in the last two weeks, with Chicago's mayor
issuing a month-long stay-at-home advisory. But a senior adviser to President-elect Joe Biden said
there were no plans for nationwide lockdowns next year and
instead talked about restrictions for specific regions when the
virus spread is bad there.
State Street's Arone said the aversion to a full lockdown
likely cheered up some investors but that optimism may be
overdone. He cited Fed official warnings about the potential
economic damage rising virus cases could do without a fresh
economic stimulus package in sight.
"The market is underestimating some of the impact that
rising cases and no stimulus will have on the economy and
earnings and they're over estimating the potential timeline and
breadth of a vaccine distribution," Arone said.
"In the spring folks were bracing for the worst and the
worst didn't happen. Now they're expecting the best and they may
be a little too rosy."
Positive data from Pfizer's PFE.N virus vaccine study on
Monday had prompted a rally that pushed the S&P 500 .SPX up
2.2% for the week and gave the Dow .DJI a 4% weekly gain. The
indexes also registered their biggest two-week percentage gains
since April.
The tech-heavy Nasdaq .IXIC , however, showed a 0.6%
decline for the week as investors booked profits in technology
stocks, which have benefited from a stay-at-home environment.
Globalt's Martin also pointed to investor hopes for news of
more coronavirus vaccine progress soon, after Moderna Inc
MRNA.O said earlier this week that it had enough data for a
first interim analysis of its late-stage trial. With third-quarter reports released from about 90% of S&P
500 companies Refinitiv IBES estimates now show profits falling
7.8% from last year compared with an Oct. 1 expectation for a
21.4% slump.
Biden solidified his victory over President Donald Trump on
Friday after the state of Georgia went his way, leaving
incumbent Donald Trump little hope of reversing the outcome
through legal challenges and recounts. Advancing issues outnumbered declining ones on the NYSE by a
4.76-to-1 ratio; on Nasdaq, a 2.83-to-1 ratio favored advancers.
The S&P 500 posted nine new 52-week highs and no new lows;
the Nasdaq Composite recorded 84 new highs and 11 new lows.
On U.S. exchanges 9.86 billion shares changed hands compared
with the 10.1 billion average for the last 20 sessions.