By Geoffrey Smith
Investing.com — U.S. stock markets started the week sharply higher, as hopes for a cure to the Covid-19 vaccine combined with hopes for further stimulus measures in a powerful cocktail.
By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was up 675 points, or 2.9%, at 24,361 points. The S&P 500 was up 2.6% and the NASDAQ Composite was up 1.9%. Optimists were undismayed by further ratcheting up of anti-Chinese rhetoric over the weekend, after White House economic advisor Peter Navarro accused the country of deliberately spreading the virus throughout the world. Those comments were offset by comments from another White House advisor, Kevin Hassett, saying that China appeared to be holding up its end of the ‘phase 1’ trade deal with the U.S.
The market was lifted in particular by a positive update on preliminary trials of an experimental vaccine for the Covid-19 virus. Biotech company Moderna (NASDAQ:MRNA) said all 45 participants in a preliminary study had produced Covid-19 antibodies as hoped. The drug still needs further and larger-scale tests. Moderna stock rose 22.5% at the open.
Stocks also took heart from a TV interview with Federal Reserve Chairman Jerome Powell at the weekend. Powell had told CBS’s 60 Minutes that the Fed still had plenty of ammunition in the fight to support the economy, indicating that it could expand the asset purchase programs already launched. He repeated the Fed’s opposition to negative interest rates, however.
Among the biggest gainers were travel and leisure stocks, which had been the worst-hit by the pandemic.
Carnival (NYSE:CCL) stock was up 12,8% while Norwegian Cruise Line Holdings Ltd (NYSE:NCLH) stock was up 15.8%. Both companies have recently undertaken big capital raisings to get them through the next few months, a period that seems destined to stay entirely fallow. Rival Royal Caribbean Cruises (NYSE:RCL) stock was also up 16.1%.
Boeing (NYSE:BA), Citigroup (NYSE:C) and Bank of America stock (NYSE:BAC) all gained, by 7.1%, 4.1% and 3.5% respectively, after the Saudi Arabian Public Investment Fund revealed it had taken a position in both. Walt Disney (NYSE:DIS) stock, another beneficiary of the PIF, likewise rose 7.5%.
Meanwhile, oil and gas sector stocks were lifted by a surge in U.S. crude prices, as the market moved to price in a quicker rebalancing of supply and demand on the national and global level, thanks to producer shut-ins and a recovery in gasoline demand prompted by the reopening of economies across North America, Europe and China.
Stocks – Wall Street Jumps at Opening on Reopenings, Vaccine Hopes
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