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Stocks rose Monday after Moderna Inc. said its vaccine candidate proved highly effective in preventing COVID-19 infections, bolstering the least-loved sectors and industries as investors rotated away from shares of companies that thrived in the stay-at-home environment created by the pandemic.
What are major benchmarks doing?
The Dow Jones Industrial Average DJIA, +1.46% advanced 442 points, or 1.5%, to 29,922, after briefly surpassing its intraday record of 29,933.83 set last week, and is on track for its first record close since February. The S&P 500 SPX, +1.08% gained 37 points, or 1.1%, to 3,622. The Nasdaq Composite COMP, +0.74% rose 71 points, or 0.6%, to 11,900, turning higher early Monday after starting the day near breakeven levels.
Read: Dow on verge of 30,000 and first record close in 10 months
The small-cap Russell 2000 RUT, +2.33% rose 2.1%.
Stocks closed with strong gains Friday, pushing the S&P 500 to its first record close since Sept. 2 and the Russell 2000 RUT, +2.33% to its first record since 2018. A rotation away from large-cap tech juggernauts that have been the main beneficiaries of the work-from-anywhere phenomenon saw the Nasdaq Composite lag behind as investors rotated into stocks and sectors left behind by the pandemic.
In One Chart: Small-cap stocks ‘remain pretty seriously underloved’ despite vaccine-fueled gains
What’s driving the market?
Moderna MRNA, +8.03% said its COVID-19 experimental vaccine cut COVID-19 infections by 94.5%. The company said it plans to submit an Emergency Use Authorization with the U.S. Food and Drug Administration in the coming weeks. Moderna shares jumped around 7%.
Last week’s rally was inspired after Pfizer and BioNTech SE on Nov. 9 announced that their vaccine candidate was more than 90% effective in preventing COVID-19 infections in a late-stage trial.
“A vaccine was a dream in March, it’s a near reality today. That may not help during the current surge, but it does promise relief by mid-2021,” said James Meyer, chief investment officer at Tower Bridge Advisors.
The U.S. counted 135,187 new cases on Sunday, and at least 623 people died, according to a New York Times tracker. In the past week, the U.S. has averaged 150,265 cases a day, up 81% from the average two weeks ago and cases are rising in 50 states and territories.
While tech shares and other stay-at-home beneficiaries lagged last week, hard-hit industries and sectors, including airlines, energy, financials and retail, benefited.
Deal-related news was also in focus, PNC Financial Services Group Inc. PNC, +2.22% agreed to buy the U.S. arm of Spain’s BBVA in an $11.6 billion transaction, the companies said Monday, in one of the largest bank tie-ups since the financial crisis. PNC shares rose 2.5%, while BBVA shares surged over 14%.
Meanwhile, investors looked past a stalled transition as President Donald Trump continued to refuse to accept the results of the Nov. 3 presidential election.
Trump early Sunday tweeted what appeared to be a tacit acknowledgment that Biden had won the election, but repeated his claim, without evidence, that the election had been rigged. Federal agencies have described the voting process as the most secure in election history. Trump subsequently tweeted that he had not conceded.
In economic data, the New York Federal Reserve Bank’s Empire State index came in at a reading of 6.3 from 10.5 in October.
Which companies are in focus?
- Tyson Foods Inc. TSN, +3.13% stock rose 3.5% after the meat processor reported fiscal fourth-quarter earnings that beat expectations and declared a dividend for fiscal 2021.
- Hilton Worldwide Holdings Inc. HLT, +2.35% said Monday it plans to offer $1 billion worth of senior notes to redeem previously issued debt. The stock rallied 2.1%.
- High-end mall developer Taubman Centers Inc. agreed to accept a price cut in its takeover by Simon Property Group Inc. SPG, in a move that will allow the companies to avoid a drawn-out legal battle that was set to kick off on Monday. Simon will pay $43 a share for Taubman under the new deal, they said Sunday. That is down from the original price of $52.50. Simon shares rose more than 8%, while Taubman shares climbed 8%.
- Casper Sleep Inc. CSPR, -17.90% shares fell 18% after the mattress-in-a-box seller saw a wider-than-expected third-quarter loss due to an unexpected decline in revenue. Casper cited supply chain challenges as a result of the COVID-19 pandemic.
How are other assets trading?
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.904% rose 1.1 basis points to 0.904%. Bond prices move in the opposite direction of yields.
The ICE U.S. Dollar Index DXY, -0.15%, a gauge of the greenback’s strength against its major rivals, was down less than 0.1%.
The pan-European Stoxx 600 index SXXP, +1.18% rose 1.4%, while the U.K.’s FTSE-100 index UKX, +1.66% Z00, -0.21% climbed 1.7%.
Crude-oil futures rose, with the U.S. benchmark CL.1, +3.41% up 3.7% to trade at $41.58 a barrel. Meanwhile, trading in gold GCZ20, +0.44% was muddled, rising $2.40 to $1,888.50 an ounce.
