Stocks are surging Monday, and Wall Street is catapulting back to record heights on a burst of hope that the world and corporate profits can get back to normal following encouraging data about a potential coronavirus vaccine.
The S&P 500 was 3.3% 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.
Financial markets around the world were already climbing before the vaccine data’s release amid relief that the limbo created by the long, market-bruising battle for the White House was finally clearing. Democrat Joe Biden over the weekend clinched the last of the electoral votes needed to become the next president.
U.S. stock futures, Treasury yields and oil prices burst even higher following the vaccine news. 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.
Stocks of companies that most need the economy and the world to return to normal for their profits to heal led the way. A 13.4% surge for Chevron and 11.6% 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 1,361 points, or 4.8%, to 29,685, as of 1:17 p.m. Eastern time.
Cruise operators, airlines and owners of office buildings and shopping centers were among the market’s biggest winners on expectations people will feel comfortable again riding elevators to a desk or shopping in enclosed stores.
Carnival surged 37.4%, though it’s still down by more than half for 2020 so far. It led a resurgence for what are called “value stocks,” ones whose prices look cheap and had gotten left behind by the rest of the market through the pandemic.
“People are buying those because they see a light at the end of the tunnel,” said Todd Morgan, chairman at Bel Air Investment Advisors.
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