(Reuters) – Wall Street’s main indexes surged on Monday as encouraging early data from a potential coronavirus vaccine trial boosted sentiment, with investors also counting on more stimulus to rescue the U.S. economy from a deep slowdown.
Drugmaker Moderna Inc (MRNA.O) said its experimental COVID-19 vaccine showed promising results in a small early-stage trial, boosting futures in premarket trading. Its own shares jumped 23%.
After surging about 34% from the multi-year low hit in March, the S&P 500 has traded in a tight range this month as easing of coronavirus-led restrictions sparked hopes of an economic recovery even as it raised the risk of another wave of infection.
“If there really is a workable vaccine that can be mass produced, it really is a game changer for so many industries about which we weren’t so sure if the reopenings would solve their problems,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
Battered travel-related stocks such as cruise line operators Carnival Corp (CCL.N), Royal Caribbean Cruises Ltd (RCL.N) and Norwegian Cruise Line Holdings Ltd (NCLH.N) jumped 13% to 18%.
The airlines subindex .SPCOMAIR added 9.3% as Delta Air Lines (DAL.N) said it would resume flying several major routes in June.
Markets also took heart from Federal Reserve Chair Jerome Powell’s remarks over the weekend on a gradual economic recovery and his affirmation that more monetary stimulus was on the way if required.
He stressed on the importance of a vaccine in establishing economic normalcy as well.
“Powell’s statement translates, at least for the moment, into a security blanket for investors,” said Andre Bakhos managing director at New Vines Capital LLC in Bernardsville, New Jersey.
At 11:00 a.m. ET, the Dow Jones Industrial Average .DJI was up 767.76 points, or 3.24%, at 24,453.18, the S&P 500 .SPX was up 84.03 points, or 2.93%, at 2,947.73. The Nasdaq Composite .IXIC was up 217.89 points, or 2.42%, at 9,232.45.
The benchmark S&P 500 was on track for its biggest one-day percentage gain in five weeks, with all the 11 major S&P sector indexes trading higher.
Energy stocks .SPNY soared 6.4% after oil prices surged on the prospect of higher demand as economic activity slowly resumes across the globe. [O/R]
General Motors Co (GM.N) rose 8.7% and Ford Motor Co (F.N) 6.7% as they prepared to reopen their North American factories in a push to restart work in an industry that accounts for about 6% of U.S. economic activity.
Advancing issues outnumbered decliners by a 10.13-to-1 ratio on the NYSE and by a 5.39-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and no new lows, while the Nasdaq recorded 78 new highs and five new lows.
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