NEW YORK (Reuters) – U.S. stocks jumped on Monday, and the S&P 500 reached a 10-week high, on encouraging early-stage data for a potential coronavirus vaccine and on the promise of more stimulus to lift an economy beaten down by the pandemic.
Drugmaker Moderna Inc (MRNA.O) surged 26.15% after the company said its experimental COVID-19 vaccine showed promising results in a small early-stage trial.
After surging more than 32% from a multi-year low hit in March, the S&P 500 had been trading in a tight range in May as investors weighed the hopes of an economic recovery against the fears of another wave of infection as states lifted virus-led restrictions.
Stocks that have been particularly battered by government lockdown measures implemented to stem the spread of the coronavirus surged on Monday. Travel-related stocks were among the biggest gainers, with cruise line operators Carnival Corp (CCL.N), Royal Caribbean Cruises Ltd (RCL.N) and Norwegian Cruise Line Holdings Ltd (NCLH.N) up at least 14%.
Airlines also soared, with the NYSE Arca airline index .XAL climbing 12.7%. Delta Air Lines (DAL.N) on Monday said it would resume flying several major routes in June.
“The reopening stuff is all working and the stay-at-home stuff is not working,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.
“What we are seeing here is we have recovered to a level where we know there is some resistance, we know it is sort of a tussle between hope and fear, and you are going to get this sort of moving amongst the different kinds of stocks,” said Martin.
The Dow Jones Industrial Average .DJI rose 926.35 points, or 3.91%, to 24,611.77, the S&P 500 .SPX gained 96.16 points, or 3.36%, to 2,959.86 and the Nasdaq Composite .IXIC added 225.59 points, or 2.5%, to 9,240.15.
Markets also took heart from comments by Federal Reserve Chair Jerome Powell over the weekend forecasting a gradual economic recovery and his affirmation that more monetary stimulus would be on the way if required. Powell is set to speak before the Senate Banking Committee on Tuesday to discuss how economic rescue efforts are working.
The benchmark S&P 500 was on track for its biggest one-day percentage gain in nearly six weeks, with all 11 major S&P sectors higher.
Cyclical plays were in favor with the energy .SPNY and materials .SPLRCM sectors climbing 7.5% and 4.8%, respectively, as a gradual recovery in economic activity pointed to more demand for oil and industrial materials.
Still, stocks that are poised to benefit the most from a restart of the economy continue to lag those that have surged from the restrictions. The S&P 500 growth index .IGX has outperformed the S&P value index .IVX by about 4 percentage points this month.
General Motors Co (GM.N) rose 9.99% and Ford Motor Co (F.N) 7.86% as started 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 declining ones on the NYSE by a 7.93-to-1 ratio; on Nasdaq, a 4.62-to-1 ratio favored advancers.
The S&P 500 posted 22 new 52-week highs and no new lows; the Nasdaq Composite recorded 88 new highs and seven new lows.
Source: Read Full Article