NEW YORK: Wall Street stocks advanced on Monday, setting the S&P 500 and the Dow on course for all-time closing highs as news of another promising coronavirus vaccine bolstered hopes of eradicating the disease, while spiking infections and new shutdowns threaten to hobble a recovery from the pandemic recession.
The blue-chip Dow Jones industrial average hit an intraday high and flirted with the 30,000 mark while the Russell 2000 was also on track for record close.
Value, cyclical and small cap shares, which stand to benefit most from an economic rebound, outperformed the broader market.
Moderna Inc said its experimental COVID-19 vaccine was 94.5% effective in preventing infection based on interim late-state data. It was the second drugmaker in as my weeks, after Pfizer Inc , to announce promising trial data in the development of a vaccine to defeat the pandemic.
Combined, pending further data and regulatory review, the United States could have as many as 60 million emergency doses available this year.
“It’s good news along the lines of Pfizer’s news a week ago,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “We have another vaccine that down the road that will enable us to get back to life as we used to live it.”
“We’re seeing the end of the tunnel getting closer.”
Travel-related stocks, which were clobbered by restrictions enacted to contain the pandemic’s spread, were in demand.
Shares of United Airlines Holdings Inc , American Airlines Group Inc , Carnival Corp and Norwegian Cruise Line Holdings Ltd jumped between 3.4% and 8.3%.
But COVID-19 continued its U.S. rampage, with cases surging past 11 millions and record infections in 40 states, prompting states to tighten social distancing mandates.
“It’s the great conundrum,” Tuz added. “Do you invest for the next three months that are likely to be pretty bleak, or do you invest for the period after that that’s likely to be much better?”
“It is a battle between short term bad news and longer term great news regarding the vaccine,” Tuz said.
The Dow Jones Industrial Average rose 337.29 points, or 1.14%, to 29,817.1, the S&P 500 gained 26.18 points, or 0.73%, at 3,611.33 and the Nasdaq Composite added 48.65 points, or 0.41%, at 11,877.94.
Of the 11 major sectors of the S&P 500, energy stocks were enjoying the largest percentage gain.
Earnings from high-profile retailers are expected this week, with Walmart Inc and Home Depot Inc expected to report on Tuesday and Lowe’s Companies Inc and Target Corp on Wednesday.
This, together with the Commerce Department’s October retail sales data, expected on Tuesday, should provide evidence as to how consumers are weathering a languid economic recovery as stimulus runs dry.
Simon Property Group Inc jumped 6.0% after the biggest U.S. mall operator cut its purchase price for an 80% stake of rival Taubman Centers Inc , as the pandemic pressures the retailers.
Advancing issues outnumbered decliners on the NYSE by a 3.97-to-1 ratio. On Nasdaq, a 2.02-to-1 ratio favored advancers.
The S&P 500 posted 40 new 52-week highs and no new lows. The Nasdaq Composite recorded 154 new highs and 12 new lows.
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