By Medha Singh and Ambar Warrick
(Reuters) – Wall Street’s main indexes surged on Monday as encouraging early data from a potential coronavirus vaccine trial boosted sentiment, with investors also counting on more stimulus to rescue the U.S. economy from a deep slowdown.
Drugmaker Moderna Inc said its experimental COVID-19 vaccine showed promising results in a small early-stage trial, boosting futures in premarket trading. Its own shares jumped 23%.
After surging about 34% from the multi-year low hit in March, the S&P 500 has traded in a tight range this month as easing of coronavirus-led restrictions sparked hopes of an economic recovery even as it raised the risk of another wave of infection.
“If there really is a workable vaccine that can be mass produced, it really is a game changer for so many industries about which we weren’t so sure if the reopenings would solve their problems,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.
Battered travel-related stocks such as cruise line operators Carnival Corp, Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings Ltd jumped 13% to 18%.
The airlines subindex added 9.3% as Delta Air Lines said it would resume flying several major routes in June.
Markets also took heart from Federal Reserve Chair Jerome Powell’s remarks over the weekend on a gradual economic recovery and his affirmation that more monetary stimulus was on the way if required.
He stressed on the importance of a vaccine in establishing economic normalcy as well.
“Powell’s statement translates, at least for the moment, into a security blanket for investors,” said Andre Bakhos managing director at New Vines Capital LLC in Bernardsville, New Jersey.
At 11:00 a.m. ET, the Dow Jones Industrial Average was up 767.76 points, or 3.24%, at 24,453.18, the S&P 500 was up 84.03 points, or 2.93%, at 2,947.73. The Nasdaq Composite was up 217.89 points, or 2.42%, at 9,232.45.
The benchmark S&P 500 was on track for its biggest one-day percentage gain in five weeks, with all the 11 major S&P sector indexes trading higher.
Energy stocks soared 6.4% after oil prices surged on the prospect of higher demand as economic activity slowly resumes across the globe.
General Motors Co rose 8.7% and Ford Motor Co 6.7% as they prepared to reopen their North American factories in a push to restart work in an industry that accounts for about 6% of U.S. economic activity.
Advancing issues outnumbered decliners by a 10.13-to-1 ratio on the NYSE and by a 5.39-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and no new lows, while the Nasdaq recorded 78 new highs and five new lows.
(Reporting by Ambar Warrick and Medha Singh in Bengaluru, additional reporting by Pawel Goraj in Gdansk; Editing by Saumyadeb Chakrabarty and Maju Samuel)