Stocks are surging domestically and abroad Monday morning after pharmaceutical giant Pfizer announced better-than-anticipated results for its coronavirus vaccine candidate, saying that it could be 90% effective at preventing the disease.
Pfizer and BioNTech reported early data on Monday showing their Covid-19 vaccine to be 90% … [+]
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Shortly after the open, the Dow Jones Industrial Average was up 6%, or nearly 1,700 points, hitting a new all-time high and putting the index on track for its third-best daily point gain.
The broader S&P 500 also reached a new high, climbing 4.4% after nabbing its best post-Election Day rally in more than a century last week.
Not all sectors, however, are rallying; the tech-heavy Nasdaq is up just 0.8% as stay-at-home pandemic favorites like Zoom, Slack and Twilio plummeted 14%, 4% and 3%, respectively, revealing some tech sensitivity to a post-pandemic future.
The Dow has now turned positive for the year, up roughly 3% since January, while the S&P pushed its year-to-date gains to nearly 8%; the Nasdaq has surged a staggering 30% this year.
Among the best-performing sectors early Monday were those hit hardest by the pandemic, including airlines (U.S. Global Jets ETF up 19%), financials (Financial Select Sector SPDR Fund up 7%) and energy (Energy Select Sector SPDR Fund up 11%).
Global markets also rallied on the vaccine news: The United Kingdom’s FTSE 100 was up 5.5% and France’s CAC 40 surged about 8%; Japan’s Nikkei 225, which closed before Pfizer’s announcement, ticked up 2%.
“[Pfizer’s] 90% efficacy number is much higher than anticipated,” says Adam Crisafulli, the founder and president of Vital Knowledge Media. “Obviously, the news is positive for all risk assets, but it should catalyze a massive shift toward cyclical and value [stocks] and away from growth and momentum (this will likely play out over the course of Monday and the coming days, with the Nasdaq underperforming).” he notes, adding that “reopening” stocks like nonessential retail, travel, leisure and commercial real estate should do best, while tech stocks may need to gear up for a “long period of consolidation” after “frontloaded” gains earlier this year.
Wall Street has been shifting focus to the availability of a coronavirus vaccine as the outcome of the election has become clearer and attention once again turns to the impending economic recovery. Vaccination is “essential for the normalization of the economy,” Goldman Sachs said in a recent note, and wealth advisory firm Glenmede doesn’t expect earnings will reach new highs until the second half of 2021, which lines up with estimates for when a vaccine will be widely available. “Covid is still a big problem; cases are surging, and governments are being forced to implement mitigation steps,” Crisafulli said Monday. “The Pfizer vaccine probably won’t get to the general population until around the spring of 2021 and then the challenge will be convincing people to take it.”
Shares of AMC, the world’s largest theater operator, are rallying a whopping 70% on Monday.