TORONTO -- North American stock markets got a boost to start December from additional signs that vaccines could spur a return to economic normalcy in 2021.

The predominant driver of market activity Tuesday was Pfizer seeking regulatory approval for its COVID-19 vaccine in the European Union, after doing so in the United States, said Candice Bangsund, portfolio manager for Fiera Capital.

“This has extended the optimism on the vaccine front that will inevitably allow for that rapid recovery in 2021,” she said in an interview.

As a result, investors are largely looking past uncertainties, growing infections and some negative economic implications from new lockdowns as they anticipate a very strong revival in global growth by the end of next year.

In addition, a bipartisan U.S. Senate proposal for US$900 billion in fiscal stimulus and president-elect Joe Biden's call for a package supported the market rally. However, Bangsund warned that past efforts show that these expectations can prove fleeting and short-lived.

The S&P/TSX composite index closed up 106.68 points to 17,296.93 after posting an intraday high of 17,471.20 that's less than three per cent off February's record high.

In New York, the Dow Jones industrial average was up 185.28 points at 29,823.92. The S&P 500 index was up 40.82 points at 3,662.45, while the Nasdaq composite was up 156.37 points at 12,355.11 after both markets set new record highs in earlier trading.

Markets started the day in positive territory, with Chinese factory results coming in strong.

They moved up after posting a phenomenal month in which the S&P 500, for example, experienced its strongest November in decades.

Bangsund expects December could also be strong, albeit not as good as November given the impact of pandemic-related restrictions.

“Any setback in the near-term would almost inevitably prove short-lived given that brighter outlook for 2021,” she said.

Bangsund added that investors are underestimating the magnitude of the eventual recovery because there's a lot of pent-up savings ready to be put to work once there's a return to some sense of normalcy.

“And when you combine that with a very supportive policy backdrop, it's really going to be a nice year for growth and for equity prices.”

The Canadian dollar traded for 77.21 cents US, its highest level of the year and compared with 77.13 cents US on Monday.

The increase came as a result of weakness in the U.S. dollar. Bangsund said it wasn't helped by Canada's economy growing by a record 40.5 per cent on an annualized basis in the third quarter, that was below expectations.

The TSX was pushed higher by the strength of the materials and heavyweight financials sectors.

Higher gold and copper prices pushed materials up 2.6 per cent, with shares of Torex Gold Resources Inc. and Eldorado Gold leading with gains of 12.1 and 10.5 per cent, respectively.

The February gold contract was up US$38.00 at US$1,818.90 an ounce and the March copper contract was up 4.7 cents at more than US$3.48 a pound.

Financials rose 1.3 per cent with Bank of Montreal shares rising 3.4 per cent and Scotiabank shares up 2.8 per cent after each posted strong quarterly results. The sector was also helped by higher treasury bond yields.

Technology moved slightly higher as shares in BlackBerry Ltd. gained as much as 63.9 per cent in intraday trading following news of a deal with Amazon Web Services to develop and market BlackBerry's intelligent vehicle data platform, called IVY.

The stock traded as high as $12.54, up from Monday's close of $7.65, before drifting lower and closing at a new 52-week high of $9.08, up 18.7 per cent.

Energy inched higher even though the January crude contract was down 79 cents at US$44.55 per barrel and the January natural gas contract was down 0.2 of a cent at US$2.88 per mmBTU.

Health care plunged 5.6 per cent with Aurora Cannabis Inc. losing 17.2 per cent.

This report by The Canadian Press was first published Dec. 1, 2020.