Wall Street’s main indexes rose on Monday as hopes of a COVID-19 vaccine and data showing a rapid expansion in monthly business activity fueled bets of a quicker economic recovery from a pandemic-driven recession.
Economically-sensitive sectors including industrials and energy jumped more than 1.5% as investors rotated out of the technology mega-caps that were perceived as safe bets following a coronavirus-led crash earlier this year.
“November has been that month when we were finally convinced that there is light at the end of the tunnel (and) today is another one of those days,” said Art Hogan, chief market strategist at National Securities in New York.
“The market has moved higher with confidence that as we get better at treating and preventing this virus, economic activity will likely follow in the wake of that.”
Data on Monday showed U.S. business activity in November expanded at the fastest rate in more than five years, topping even the most optimistic forecasts in a Reuters poll.
At 10:22 a.m. ET, the Dow Jones Industrial Average was up 250.54 points, or 0.86%, at 29,514.02, the S&P 500 was up 18.96 points, or 0.53%, at 3,576.50, and the Nasdaq Composite was up 11.06 points, or 0.09%, at 11,866.03.
Global equity markets had earlier received a boost as AstraZeneca Plc became the latest major drugmaker to say its COVID-19 vaccine could be around 90% effective, although its shares fell 3.8% as some traders perceived the efficacy data as disappointing compared with rivals.
“There’s good news on the coronavirus vaccine and that’s building a lot of enthusiasm in a short trading week, but the enthusiasm might be getting a little bit overdone,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“It isn’t like the vaccine is going to be distributed tomorrow. It’s going to take at least a month and so we are still pretty far away before reality sets in.”
Market participants also warned of higher volatility in a trading week shortened by the Thanksgiving holiday on Nov. 26. Evidence of high efficacy rates in experimental vaccines had lifted the S&P 500 to a record high earlier this month, although gains have since been capped by new coronavirus-led restrictions to contain a surge in infections.
Meanwhile, hopes of more monetary stimulus were dampened after Treasury Secretary Steven Mnuchin last week pulled the plug on some of the Federal Reserve’s pandemic emergency lending programs.
In company news, shares of drugmaker Regeneron Pharmaceuticals Inc rose 0.5% after the FDA on Saturday granted emergency use authorization to its COVID-19 antibody therapy.
Advancing issues outnumbered decliners 3.67-to-1 on the NYSE and 1.75-to-1 on the Nasdaq.
The S&P index recorded 26 new 52-week highs and no new low, while the Nasdaq recorded 125 new highs and seven new lows.
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