UPDATED after market close: The Dow closed at 29,662.42, up 1,339 points or 4.3% — off its earlier highs but still reflecting a massive gain for one session.
A swell of optimism that a vaccine by Pfizer said to be 90% effective in preventing COVID-19 could by submitted for emergency authorization to the FDA by the end of the month vaulted stocks higher. Traditional names, in media and elsewhere way outpaced tech and stay at home shares like Peloton and Zoom that had thus far been big winners during the pandemic. Investors were banking on an economic restart. Money that had been sitting on the sidelines not known where to head poured back into retail, travel and energy — including a surge in oil prices — and media from exhibition to broadcast to theme parks and traditional names.
The reality of a Joe Biden presidency, which started to take shape Monday as he named key advisors, comes a few key thinks the market likes: a new fiscal stimulus; infrastructure investment; and a more thoughtful approach to international trade and foreign policy.
The S&P 500 ended up 1.17%. The tech-heavy Nasdaq finished the day ahead by 1.53%.
Media and entertainment share were swept higher in a massive rally Monday morning hours after early data from drug giant Pfizer showed its vaccine is 90% effective in preventing COVID-19 infection.
The Dow was up about 1,325, or 5% midmorning after having surged more than 1,600 points in early trade, the first intraday day record since February. The S&P was up 3.5%, also in record territory. The Russell 2000 surged a whopping 7% and the tech-heavy Nasdaq was up a more modest 1.5%.
The DJIA earlier today hit 29,933.83, beating its previous intraday high of 29,568.59 on February 12 pre-pandemic.
Shares of Pfizer jumped more than 12% after announcing a clinical trial showed its vaccine was more than 90% effective in preventing the virus in participants with no evidence of a previous infection. Shares of BioNTech, which is working on the vaccine alongside Pfizer, jumped more than 14%.
A 90% prevention rate would be very high, higher than expectations and on the level with measles and other routine childhood vaccines. Often vaccines can be less effective. Flu vaccines, according to the CDC, are only 40%-60% effective. The FDA had established a 50% rate to greenlight a COVID-19 vaccine.
Pfizer is still monitoring volunteers in the international trial after a second dose for effectiveness and safety. That’s a two-month process the firm anticipates completing by the third week of November. Soon after, it plans to seek emergency use authorization from FDA. The analysis of data by an independent monitoring committee over the weekend has not been peer reviewed, but Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, called the results “extraordinary.”
So, no surprise, stocks were up — by a lot — nearly across the board as investors look forward to days when people and companies can and will actually go out and do stuff. Theater chain Cinemark surged 60%, struggling AMC Entertainment was up 50%. Concert juggernaut Live Nation gained 20%. Retailers (Macy’s, Nordstrom), airlines and cruise lines were busting out. The depressed energy sector surged on optimism that the days of a more lively economy are approaching and will need fuel to run on.
Disney and Comcast were up 13% and 7% respectively. Lionsgate, AMC Networks and Discovery gained, along with broadcasters.
Netflix was down 7%.
Tech stocks Facebook, Amazon, Roku, Snap, Spotify trailed today as market players felt freer to be more bullish on a wider range of investment options — more confident in moving, at least for today, away from so-called growth stocks like tech and into so-called value stocks of more traditional businesses.
The market’s move is also in part a nod to the momentous events of the weekend that saw President-elect Joe Biden’s acceptance speech as his team begins gearing up today for a handful of initiatives he announced Saturday night. AP and the major networks have declared him the winner of the presidential race over the protests of President Trump, who continues to contest the vote counts in several key states.
The fact that the Senate, however, looks likely to remain in Republican hands is reassuring to markets wary of tax hikes or a more progressive agenda. We won’t know the final Senate makeup until runoffs in January decide two seats in Georgia, although the Dems would need to win both to control the chamber and so far predictions give them small odds of doing that.
COVID cases in the U.S. are set to hit the ten million mark this week. On the vaccine, in an interview, this morning with Good Morning America, New York Governor Andrew Cuomo cautioned George Stephanopoulos that having it is fantastic but the implementation has to be done properly. He’s often been a voice of caution and has little faith in the competence of the administration.
“The good news is that the Pfizer tests look good and we’ll have a vaccine shortly. The bad news is that it’s about two months before Joe Biden takes over and that means this administration is going to be implementing a vaccine plan. The vaccine plan is very important. It’s probably the most ambitious undertaking since COVID began,” he said. And as COVID cases spike across the country, he think the way Trump administration is rolling out the vaccination plan is flawed.
“I believe it learns nothing from the past. They’re basically going to have the private providers do it and that’s going to leave out all sorts of communities that were left out the first time when COVID ravaged them,” Cuomo said.
“I’ve been talking to governors across the nation about that – how can we shape the Trump administration vaccine plan to fix it or stop it before it does damage,” he said.