Wall Street’s main stock indexes surged to new record highs 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 over the weekend passed the 270 electoral vote threshold needed to win the White House.
The Dow Jones Industrial Average soared 1,600 points to a record high during the opening minutes of trading on Wall Street. Shortly after noon in New York, the 30 share index was more than 1200 pionts or 4.27 percent at 29,531.75.
The S 500 – a gauge for the health of US retirement and college savings reports – also hit a new record and was trading up 2.62 percent around noon on Wall Street. The tech-heavy Nasdaq Composite Index was up 3.9 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 were up 9.56 percent in early afternoon trading.
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 over 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 expect 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”.
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 were up more than 13 percent in early afternoon trading. Shares of cruise operator Carnival PLC were up more than 34 percent, while shares of cinema operator AMC Entertainment were up more than 58 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 were down more than 5 percent, Amazon shares were down more than 3 percent, while Clorox shares were down more than 7 percent.
