November 28, 2020

Market and Financial News Aggregator

S&P 500, Dow set to surge as vaccine moves step closer By Reuters

3 min read

© Reuters. The U.S. flag is seen outside of the New York Stock Exchange (NYSE) in New York City

By Medha Singh and Shivani Kumaresan

(Reuters) – U.S. stock prices surged on Monday as news of the first successful late stage COVID-19 vaccine trials stirred hopes of the economy emerging from a year of pandemic-driven crisis.

With markets also benefitting from a bounce after Joe Biden’s clinching of a tightly-fought presidential election, futures showed the S&P 500 on track to open at a record high after the news from Pfizer (NYSE:) and German partner BioNTech.

The companies hit hardest by months of travel bans and lockdowns soared, with Boeing (NYSE:) Co up 15%, and airlines and cruise line operators, all between 20% to 30% higher.

Pfizer shares jumped 13% while futures tracking the small-cap index jumped 7% to hit its upper trading limit by 07:38 a.m. ET.

Dow E-minis jumped 5% while S&P 500 E-minis gained 3.36% to 3,618.5 points; the daily up limit is at 3,746.

“This is very very important (news) because it validates the market view that the economy and earnings can receive that growth path that they had before the (COVID-19) crisis struck,” said Andrea Cicione, Head of Strategy at TS Lombard in London.

U.S. banks including Citigroup Inc (NYSE:), Bank of America Corp (NYSE:) and Goldman Sachs Group Inc (NYSE:), often seen as a proxy for the broader economy, jumped between 5% and 8% after Pfizer and BioNtech said the data showed the vaccine was more than 90% effective in preventing COVID-19.

The companies, the first drugmakers to show successful data from a large-scale clinical trial, said they had found no serious safety concerns so far, and expect to seek U.S. emergency use authorization later this month.

“The bigger driver of the economic outlook is from the outside factors,” said ING analyst Carsten Brzeski. “Right now that means the development of a vaccine.”

By contrast, shares in tech and other companies seen as “stay-at-home” winners were lower or gaining less.

Nasdaq futures were down 135.75 points or 1.12% with Netflix Inc (NASDAQ:) dropping 5.6%, gaming company Activision Blizzard (NASDAQ:), Inc and (NASDAQ:) down about 3% and Apple Inc (NASDAQ:) marginally lower on the day.

Biden’s victory in Pennsylvania on Saturday put him above the 270 Electoral College votes needed to secure the presidency, four days after Election Day, although President Donald Trump does not plan to concede anytime soon.

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2020-11-09 09:15:28

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