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Economic news
Stephen culp
NEW YORK (Reuters) – The S&P 500 and blue-chip Dow indices tracked the rise in global stock indices and US Treasury yields surged on Monday, as progress in developing a vaccine against the coronavirus has sparked renewed optimism about the solid recovery as life returns to normal,
A pivot away from tech and into value stocks pushed the S&P and the Dow higher, but they ended the session without hitting record highs. Crude oil prices, meanwhile, had their best day in more than five months, jumping more than 8%.
The weakness of stocks that have benefited from restrictions linked to the pandemic, so-called “home” actions, has pulled the highly technological Nasdaq into the red.
Pfizer Inc said its COVID-19 vaccine, developed with its German partner BioNTech SE, was over 90% effective in preventing infections, marking the first positive results from a large-scale clinical trial.
“It’s the closest we’ve had to any hopes people have since March that things will come back to how they were,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “You can throw all the stimulants you want, but if people are afraid of going to the movies or flying on a plane, it might not go anyway.”
Global stock markets quickly received a boost as world leaders hailed the results of the U.S. election, praising President-elect Joe Biden even as outgoing President Donald Trump refused to give in, vowing to challenge the result.
“You could call it an electoral relief rally,” Nolte added. “Now we can move on.”
The CBOE Market Volatility index, a barometer of investor anxiety, hit its lowest closing level since late August.
The Dow Jones Industrial Average rose 834.57 points, or 2.95%, to 29,157.97, the S&P 500 gained 41.06 points, or 1.17%, to 3,550.5 and the Nasdaq Composite fell from 181.45 points, or 1.53%, to 11,713.78.
Pfizer’s announcement rocked European stocks, pushing them to an eight-month high, building on expectations of more stable trade policies in the wake of Biden’s victory.
The pan-European STOXX 600 index rose 3.98% and the gauge of MSCI stocks around the world rose 1.30%.
Emerging market equities rose 1.36%. MSCI’s largest Asia-Pacific stock index outside of Japan closed up 0.92%, while Japan’s Nikkei%.
The vaccine news has long sent the US Treasury skyrocketing returns in their biggest one-day jump since March. The yield curve, a sign of risk appetite, hit its highest level since March.
The 10-year benchmarks last fell 33/32 for a return of 0.9321%, down from 0.82% late Friday.
The price of the 30-year bond last fell 90/32 to a yield of 1.7223%, down from 1.598% on Friday night.
Oil prices surged, posting their biggest daily percentage gain in more than five months, as vaccine news and an OPEC exit deal fueled optimism over the rebound in demand.
US crude rose 8.48% to $ 40.29 a barrel and Brent rose to $ 42.40, up 7.48% on the day.
The prospect of a Biden presidency boosted trade-linked currencies on expectations of a thaw in the tariff war as the dollar index fell from a 10-week low.
The dollar index rose 0.68%, with the euro down 0.49% to $ 1.1814.
The Japanese Yen weakened 1.93% against the greenback to 105.39 per dollar, while the British pound last traded at $ 1.3161, up 0.04% on the day.
Gold prices fell as investors turned away from the safe haven metal in favor of riskier assets.
Spot gold fell 4.3% to $ 1,867.41 an ounce.
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