US stocks soar as investors bet on coronavirus vaccine
S&P 500 hits 10-week high on vaccine hopes and stimulus promise.
Early-stage data about a drug that could be used to fight the coronavirus and the promise of greater stimulus for the United States economy sent stocks higher on Monday.
The Dow Jones Industrial Average rose 3.85 percent, to end the day at 24,597.37. The S&P 500, a widely used gauge of US retirement and education savings accounts, rose 3.15 percent. The Nasdaq Composite Index added 2.44 percent.
Drugmaker Moderna Inc ended the day up 19.96 percent after the company said its experimental COVID-19 vaccine showed promising results in a small early-stage trial.
Still, some analysts expect trouble ahead. “I would say that we need to anticipate volatility in the midst of this,” said Loreen Gilbert, president of Wealthwise Financial Services. “We don’t have a vaccine yet, and there’s still a long road ahead to get Americans vaccinated. So I’m sticking to the fact that I think we’re going to see more volatility ahead in the markets.”
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: cruise line operators Carnival Corp, Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings Ltd all rose at least 14 percent.
Airlines also soared, with the New York Stock Exchange Arca Airline Index climbing 12.7 percent. Delta Air Lines on Monday said it would resume flying several major routes in June.
US markets were also energised by US Federal Reserve Chair Jerome Powell’s comments over the weekend. The US central banker forecasted a gradual economic recovery and affirmed more monetary stimulus would be on the way if required. Powell is expected to address the US Senate Banking Committee on Tuesday to discuss how economic rescue efforts are working.
A gradual recovery in economic activity pointed to more demand for oil and industrial materials. The energy and materials sectors climbed 7.5 percent and 4.8 percent, respectively.