Stocks around the world are rising on Monday, sending Wall Street back to record heights, following a burst of hope after promoting data for a possible COVID-19 vaccine.
In early trading, the S&P 500 jumped 3.2 percent after Pfizer said an early peek at its vaccine information indicates that the shots may be 90 percent effective in preventing COVID-19, although that does not mean that its release is imminent. That put the index at the heart of many 401(k) accounts on track for the first time in more than two months to close at a record.
Before the release of vaccine data, financial markets around the world were already climbing, and Wall Street seemed set to follow on relief that the limbo created by the long, market-bruising battle for the White House was finally clearing up. The last electoral vote needed to become the next president was clinched by Democrat Joe Biden over the weekend.
But immediately after the news of the vaccine, U.S. stock futures, Treasury yields, and oil prices burst even higher. The 10-year Treasury yield shot up from 0.81 percent prior to the announcement to 0.93 percent, a major move for the bond market, and one that shows greater economic confidence.
For their profits to heal, stocks of businesses that most need the economy and the world to return to normal led the way. In the hope that people will start driving and flying to theme parks again, a 16.1 percent rise for Chevron and a 13.5 percent leap for The Walt Disney Co. helped drive the Dow Jones Industrial Average to a leap of 1,290 points, or 4.6 percent, to 29,614, as of 9:45 a.m. eastern time.
Cruise operators, airlines, and mall owners were among the biggest winners in the market as well.
The big tech companies that drove the market higher earlier in the pandemic were lagging behind, largely because they didn't need a "normal" economy. For the Nasdaq composite, which increased a more modest 0.9 percent, that kept a lid on the gains.
If a COVID-19 vaccine does indeed pan out, it is called a "game-changer" by analysts and just what the market was waiting for. Once again, it underlines how the coronavirus and its effect on the economy are the main investor concerns, much more than who wins what in Washington.
Nevertheless, analysts caution that several risks remain that could trigger the great recent gains of the market.
As they concentrate on a more encouraging future, investors are pushing stocks up, but the present is still bleak in many ways. Coronavirus counts continue to rise at troubling rates across much of Europe and the United States, so much so that business restrictions have been brought back by several European governments.