Wall Street’s main indexes have surged as encouraging early data from a potential coronavirus vaccine trial boosted sentiment, with investors also counting on more stimulus to rescue the economy from a deep slowdown.
Drugmaker Moderna said its experimental COVID-19 vaccine showed promising results in a small early stage trial, boosting futures in premarket trading. Its own shares jumped 14 per cent.
Investors have kept a close eye on vaccine programs of several drugmakers, cheering any positive development amid fears of a second wave of infections as governments start easing restrictions.
Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey, said if an effective vaccine was found it would have a big impact on the market.
“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,” he said.
Battered travel-related stocks such as cruise line operators Carnival, Royal Caribbean Cruises and Norwegian Cruise Line jumped more than 10 per cent on Monday, while the airlines subindex also added 10.3 per cent.
Markets were also encouraged by 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 had also stressed the importance of a vaccine in establishing economic normality.
At 9.51am local time on Monday, the Dow Jones Industrial Average was up 757.31 points, or 3.20 per cent, at 24,442.73, the S&P 500 was up 74.88 points, or 2.61 per cent, at 2,938.58, and the Nasdaq Composite was up 162.15 points, or 1.80 per cent, at 9,176.71.
The benchmark S&P 500 was on track for its biggest one-day percentage gain in more than a month, with all the 11 major S&P sector indexes trading higher.
Energy stocks soared 6.7 per cent after oil prices surged on the prospect of higher demand as economic activity slowly resumes across the globe.
General Motors rose 9.8 per cent and Ford Motor 6.9 per cent as they prepared to reopen their North American factories in a push to restart work in an industry that accounts for about 6.0 per cent of US economic activity.
Advancing issues outnumbered decliners more than 13-to-1 on the NYSE and 7-to-1 on the Nasdaq.
The S&P index recorded 17 new 52-week highs and no new low, while the Nasdaq recorded 68 new highs and three new lows.