By: AP
Stocks are soaring worldwide Monday, and Wall Street is catapulting back to record heights on a burst of hope that the economy can get back to normal following encouraging data about a potential coronavirus vaccine.
The S&P 500 was 2.7% higher in afternoon trading after Pfizer said an early peek at its vaccine data suggests the shots may be 90% effective at preventing COVID-19, though that doesn’t mean its release is imminent. The index at the heart of many 401(k) accounts is on track to close at an all-time high for the first time in more than two months.
Treasury yields and oil prices burst higher as the vaccine news allows investors to feel confident about a stronger economic recovery on the way. The yield on the 10-year Treasury shot up from 0.81% before the announcement to 0.95%, a very big move for the bond market and one that shows stronger confidence in the economy. The key rate touched its highest level since March earlier in the morning, according to Tradeweb. U.S. oil jumped 8.3%.
Stocks of companies that most need the economy and the world to return to normal for their profits to heal led the way. An 11.9% surge for Chevron and 12% jump for The Walt Disney Co. amid hopes that people will start driving and flying to theme parks again helped the Dow Jones Industrial Average leap 1,255 points, or 4.4%, to 29,582, as of 2:38 p.m. Eastern time.
Companies whose fortunes soared directly because the pandemic kept everyone hunkered at home, meanwhile, fell sharply. Zoom Video Communications, whose online meetings allow millions of remote students and workers to communicate, sank 14.9%. Grubhub, which benefited from people ordering in for dinner, dropped 10.2%. Etsy, whose online marketplace rode a wave of popularity for handmade masks, lost 12.6%.
If a vaccine for COVID-19 does indeed pan out, analysts say it’s a “game changer” and just what the market had been waiting for. It underscores again how the coronavirus and its effect on the economy are the dominant concerns for investors, much more than who wins what in Washington.
The 90% effectiveness rate for Pfizer’s potential vaccine is what struck Ajay Rajadhyaksha, head of macro research at Barclays.
Pfizer jumped 8.7% as its announcement indicates the company and its German partner, BioNTech, are on track to file an emergency use application for their COVID-19 vaccine with U.S. regulators later this month.
(AP)