WALL STREET RALLIES ON COVID VACCINE TRIAL RESULTS
The S&P 500 and the Dow rallied sharply but closed shy of their records on Monday (Tuesday, November 10, 2020 in Manila) as investors bet that a full economic reopening was finally in sight following the first positive data from a late-stage COVID-19 vaccine trial, Sinead Carew reported for Reuters.
US crude oil rose more than 8% and pushed up energy stocks while safe-haven US Treasuries sold off after U.S. drugmaker Pfizer and its German partner BioNTech said a large-scale trial of their vaccine showed it was more than 90% effective in preventing COVID-19. Investors said they were also reassured by Saturday’s news that Joe Biden had garnered enough votes to win the U.S. presidential election as they had priced in this news last week.
The Dow Jones Industrial Average rose 834.57 points, or 2.95%, to 29,157.97 in its biggest one-day percentage gain since June 5. The S&P 500 rose 41.06 points, or 1.17%, to 3,550.5 and the Nasdaq Composite dropped 181.45 points, or 1.53%, to 11,713.78. With a 14% advance the S&P energy index led gainers among the S&P 500’s 11 major sectors and registered its biggest daily percentage gain since March as investors bet demand would climb again when people become more comfortable with the idea of traveling as the health crisis subsides. Also, bank shares, often seen as a proxy for the broader economy, soared 13% in their biggest one-day advance since late March to hit their highest level since June.
The companies hit hardest by months of travel bans and lockdowns surged. The NYSE airlines index closed up 19.4% while planemaker Boeing Co jumped 13.7%. Cruise line operator Carnival Corp. finished up more than 39%. In contrast, the consumer discretionary sector was the S&P’s biggest sector decliner with a 1.6% loss while the technology sector ended the day 0.7% lower, pushing the Nasdaq lower for the session. Companies that had outperformed during the pandemic as they were seen as “stay-at-home” winners fell sharply. Netflix Inc fell 8.5% and Amazon.com Inc. declined 5% while Zoom Video tumbled 17.3% and exercise bike maker Peloton Interactive Inc. plunged 20.3% to limit the Nasdaq’s advance.