STREET HIGH ON VACCINE
Test results give hope
US stocks surged Monday on hopes for a coronavirus vaccine, clawing back losses after the Fed’s dire warnings about the pandemic’s fallout fueled their worst week in two months.
The Dow Jones industrial average jumped 911.95 points, or 3.9 percent, to 24,597.37, after biotech firm Moderna reported promising results from a small human trial of its COVID-19 vaccine.
Optimism about the drug led the S&P 500 3.2 percent higher, while the Nasdaq climbed 2.4 percent despite the limited scope of Moderna’s announcement.
Moderna said its vaccine showed signs of being safe and effective in the first phase of a trial led by the National Institute of Allergy and Infectious Diseases. While the vaccine was working in all 45 participants, the Massachusetts-based company said the data so far only showed that eight people developed “neutralizing antibodies” after two doses.
Shares in Nasdaq-listed Moderna skyrocketed as much as 30 percent on the news before closing at $80, up 20 percent.
Monday’s surge underscored Wall Street’s excitement about medical advances in the fight against COVID-19. Investors also cheered signs last month that Gilead Sciences’ antiviral drug remdesivir may help treat coronavirus patients.
Experts consider an effective vaccine key to restarting the economy because it will help make consumers comfortable traveling, shopping and eating out after spending months hunkered down at home to avoid the deadly virus.
“It significantly lowers the risk of a secondary shutdown, and … in line with that, it reduces the risk that you have a significant resurgence of this the next flu season,” said Dan Genter, CEO and chief investment officer of RNC Genter Capital Management.
Investors “want good news so bad, they just want anything that’s going to allow them to feel good about reinvesting,” Genter added.
Stocks were on shakier ground last week following Federal Reserve Chairman Jerome Powell’s warnings that the virus crisis may require “additional policy measures” from the Fed, which has already slashed its benchmark interest rate to near zero and started buying up trillions of dollars in assets to backstop the economy.
However, he helped lift Wall Street’s spirits over the weekend by repeating his pledge that the central bank will do whatever it takes to backstop the economy amid the pandemic, according to experts.
In a “60 Minutes” interview aired Sunday, Powell said the Fed is “not out of ammunition by a long shot,” even after committing trillions of dollars in support.