Dow closes up 830 points on promising Pfizer COVID vaccine news

Both the Dow and the S&P 500 hit new record highs during Monday’s session as optimism surged for a breakthrough in the quest for a coronavirus vaccine.

The Dow and S&P hit new records before the rally lost some steam on Monday as trial data from Pfizer and BioNtech showed that their COVID-19 vaccine prevented more than 90 percent of infections [File: Carlo Allegri/Reuters]

Wall Street’s main stock indexes rallied on Monday after drug companies Pfizer and BioNTech said their experimental COVID-19 vaccine was more than 90 percent effective and President-elect Joe Biden during the weekend passed the 270 electoral vote threshold needed to win the White House.

The Dow Jones Industrial Average soared more than 1,600 points to a new record high during the opening minutes of trading on Wall Street. Some of the steam came out of that rally as the session wore on, but the 30-share index still managed to close out the session up more than 834 points or 2.95 percent at 29,157.97.

The S&P 500 – a gauge for the health of US retirement and college savings reports –  also hit a new record high before finishing the session up 1.17 percent. The tech-heavy Nasdaq Composite Index meanwhile fell under pressure to close down 1.53 percent.

Hopes for a health solution breakthrough in the COVID-19 pandemic kicked into overdrive on Monday after Pfizer and its German partner BioNTech became the first drugmakers to release successful findings from a large-scale clinical trial of an experimental coronavirus vaccine.

“Today is a great day for science and humanity,” Albert Bourla, Pfizer’s chairman and chief executive said in a statement posted on the drug giant’s website. “With today’s news, we are a significant step closer to providing people around the world with a much-needed breakthrough to help bring an end to this global health crisis.”

Shares of Pfizer closed the session up 7.69 percent.

The office of President-elect Biden on Monday called the Pfizer, BioNTech vaccine trial findings  “excellent news” but managed the country’s expectations, saying that even if the vaccine is approved by late November, “it will be many more months before there is widespread vaccination in this country.”

President Donald Trump took to Twitter to call the Pfizer vaccine announcement “GREAT NEWS” and tout the strength of the stock market.

Trump has not conceded the election and he and his allies continue to push unfounded claims of voting fraud while vowing to keep challenging results in several states.

That did not stop Wall Street analysts from releasing forecasts during the weekend of what a Biden presidency combined with a Senate in which Republicans retain control would mean for a new round of virus relief aid from Congress for struggling businesses and the unemployed.

Economists at Goldman Sachs led by Jan Hatzius expected a slimmed-down $1 trillion stimulus package potentially enacted before Biden’s inauguration on January 20.

Chief US economist Gregory Daco at Oxford Economics is also forecasting a $1 trillion stimulus “passed around year-end”.

A group of friends who live in New York City celebrate after former Vice President Joe Biden was declared the winner of the 2020 US presidential election as they ride down Fifth Avenue in a rented open-top double-decker bus in Manhattan, New York City, US [File: Andrew Kelly/Reuters]

Both Goldman and Oxford Economics stressed in their notes during the weekend that the trajectory of the COVID-19 pandemic and the quest for a vaccine continues to play a pivotal role in the economic outlook.

“Assuming the FDA approves at least one vaccine by January and mass immunization of the general population starts shortly thereafter, as we expect, growth should pick up sharply in Q2,” Goldman Sachs analysts said.

While surging COVID-19 infections in the US and Europe are expected to weigh on the economic recovery in the fourth quarter, renewed hopes for a vaccine saw companies stifled by the pandemic’s lockdowns and travel bans gain handsomely at the open of trading in New York.

Shares of Boeing closed up more than 13 percent. Shares of cruise operator Carnival PLC gained more than 37 percent on the day, while shares of cinema operator AMC Entertainment finished the session up more than 51 percent.

On the flip side, big tech and other companies that have profited handsomely from COVID shifts in consumer and work habits saw some of the wind taken out of their sales.

Shares of Netflix finished the session down more than 8.5 percent, Amazon shares finished down more than 5 percent, while Clorox shares lost more than 10 percent.

Source: Al Jazeera