Hopes of virus treatments help push markets higher
Vaccine development, OK for convalescent plasma spur rise
NEW YORK — Stocks plowed higher Monday on Wall Street as hopes for a COVID-19 treatment and vaccine had investors looking ahead to the possibility of a healthier economy that has shed the virus.
The S&P 500 rallied 34.12, or 1%, to 3,431.28 and added to the all-time high set last week, when it erased the last of its losses from the coronavirus pandemic. It followed solid gains for stock markets across much of Europe and Asia.
The Dow Jones Industrial Average rose 378.13, or 1.4%, to 28,308.46, and the Nasdaq composite added 67.92, or 0.6%, to 11,379.72.
Hope was rising as pharmaceutical companies continue to work toward a possible vaccine for COVID-19 and after the U.S. government on Sunday approved an emergency authorization to allow the use of convalescent plasma to treat patients.
The plasma comes from patients who have recovered from the coronavirus, and it may help people battling the disease, though global health officials say the therapy is still experimental.
Such hopes helped invigorate shares of industries that have been badly beaten down amid the pandemic. Airlines climbed, for example, amid the possibility that people may feel safe enough to travel again in the future. Delta Air Lines rose 9.3%, and American Airlines Group added 10.5%.
The market’s gains were relatively broad, and more than 80% of the stocks in the S&P 500 were higher. Financial companies, energy producers and other areas of the market closely tied to the economy’s strength helped lead the way.
The moves come as investors hope the virus’ spread continues to slow and the economy continues to improve, said Keith Buchanan, portfolio manager at Globalt Investments.
“We’re just making sure that the trends we’ve seen as of late from the virus continue to materialize,” he said. “We want to start to see marginal, steady improvement.” Whether the stock market’s gains continue to broaden out is an important marker for analysts, because much of its gains in its return to a record have come from only a handful of Big Tech companies. Apple, Amazon and other tech giants have benefited from the pandemic because it’s accelerated work-fromhome, shop-from-home and other trends that are very profitable for them. But all that concentration of gains in a small cadre of companies can increase risk for the market.
Last week, the S&P 500 would have been down if not for the performance of a single stock: Apple, whose 8.2% spurt also made it the first U.S. stock to be worth $2 trillion. And the dominance for Big Tech in the stock market has been stretching back for years.
“This is not new news nor is it likely, in our view, to derail the new bull market,” Morgan Stanley equity strategist Michael Wilson wrote in a report. “However, we do think it’s a precursor to the first tradable correction, which could begin imminently.”