ViacomCBS, Walt Disney Lead Showbiz Shares Higher In Massive Market Rally

Showbiz shares surged in a major market rally that saw the DJIA close up by nearly 1,000 points Monday.

ViacomCBS ended the session 11% higher as a Wall Street analyst upgraded the stock to ‘buy’ and the company’s chairman Shari Redstone and CEO Bob Bakish told annual meeting attendees that they consider the stock undervalued and are committed to changing that.

Walt Disney gained 7.4%. A number of high profile investors — from Daniel Loeb of Third Point Capital to Saudi Arabia’s sovereign wealth fund — have added positions in the company to their portfolios. The stock purchases were revealed Friday in SEC filings for the first quarter. Amid signs that the economy is starting to reopen a bit, the company will begin a phased reopening of Disney Springs, the shopping and dining area of Walt Disney World in Orlando, on Wednesday.

Media and entertainment stocks outpaced the very upbeat broader market. The DJIA rose by 3.95%, the S&P 500 by 3.15% and the Russell 2000 by 6.2%.

Fueling investor glee was news that an early COVID-19 vaccine from biotech company Moderna had initial positive results. The Cambridge, Mass., company had partnered with the National Institutes of Health to develop the vaccine. Moderna CEO Tal Zaks said it could be publicly available as early as January if the studies continue to go well.

“This is absolutely good news and news that we think many have been waiting for quite some time,” Zaks told CNN, about early data come from a Phase 1 clinical trial.

The sample is small so far. Moderna said that all eight people it had vaccinated developed neutralizing antibodies to the virus at levels reaching or exceeding that seen in people who have recovered from the infection naturally. (Moderna is one of eight developers worldwide working on human clinical trials for novel coronavirus vaccine.)

Meanwhile, Federal Reserve Chairman Jerome Powell had set the scene on Sunday, charming markets in an interview with Scott Pelley on 60 Minutes where he said the central bank is standing by to do more to shield the economy from the pandemic’s devastating impact.

“There’s a lot more we can do. We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot … and we’re committed to doing everything we can as long as we need to,” Powell said. “We can enlarge our existing lending programs. We can start new lending programs if need be. … There are things we can do in monetary policy. There are a number of dimensions where we can move to make policy even more accommodative. Through forward guidance, we can change our asset purchase strategy,” he said.

He anticipated growth in the third quater and second half of the year.

Any positive spin for the economy also boosts the hardest hit shares, many of which have been in the showbiz sector. Live Nation closed up nearly 16%, Cinemark up 12% and AMC Entertainment up 5%.

Among other major players, Comcast jumped 6%, AT&T 5% and giant broadcaster Nextstar nearly 8%.