Stocks rise on latest hopes for virus vaccine
More encouraging news on the development of coronavirus vaccines and treatments helped power stocks higher on Wall Street Monday, as the market clawed back most of its losses from last week.
The S&P 500 index rose 0.6 percent, led by banks, energy and industrial companies, sectors that have been beaten down during the pandemic. Health care and technology stocks, which traders have bid up sharply this year, closed lower. Treasury yields mostly rose, another sign of optimism among investors.
The latest vaccine developments are helping to raise hopes that some normalcy will eventually be restored to everyday life and the economy. It is also tempering lingering concerns over rising virus cases in the U.S. and new government restrictions on businesses aimed at limiting the spread.
“Investors continue to embrace and see the optimism in the development of vaccines, providing light at the end of the tunnel and multiple choices on how to get there,” said Adam Taback, chief investment officer for Wells Fargo Private Bank.
The S&P 500 rose 20.05 points to 3,577.59. The benchmark index, which climbed to an all-time high a week ago, recouped nearly three-fourths of its decline from last week. The Dow Jones Industrial Average gained 327.79 points, or 1.1 percent, to 29,591.27. The technology-heavy Nasdaq composite added 25.66 points, or 0.2 percent, to 11,880.63.
Roughly 73 percent of the stocks in the S&P 500 rose. In another signal that investors were feeling confident, the Russell 2000 index of smaller stocks outpaced the broader market, picking up 32.96 points, or 1.8 percent, to 1,818.30. The yield on the 10-year Treasury rose to 0.86 percent from 0.81 percent late Friday.
Many of the companies making gains would greatly benefit froma vaccine allowing people to travel, shop and dine out. Cruise line operator Carnival rose 4.7 percent and hotel company Marriott International gained 3.2 percent. JP Morgan Chase rose 2.9 percent.
The string of upbeat news about vaccine development has been butting up against increased caution as the virus continues to threaten the economy. That push and pull ultimately sent the S&P 500 to a loss lastweek. But, in the longer term, any positive updates on the vaccine front should be more dominant for the markets, said David Kelly, chief global strategist at JP Morgan Funds.
“It’s not a question of the vaccine versus the winter wave,” he said. “A reasonable forecast is uncertainty will go down.”
Energy companies notched among the biggest gains in the S&P 500 as the positive vaccine news stoked optimism about more demand for oil, sending the price of U.S. crude 2.2 percent higher. Occidental Petroleum led all stocks in the S&P 500, climbing 16.8 percent.