U.S. Stocks Pull Back Off Best Levels But Remain Sharply Higher

Market trading boards are seen at the Australian Securities Exchange in Sydney, Friday, February 9, 2018. ( AAP Image/Ben Rushton) NO ARCHIVING

After skyrocketing early in the session, stocks have given back some ground but remain sharply higher in mid-day trading on Monday. The major averages are adding to the strong gains posted last week and reached new record intraday highs in early trading.

Currently, the Dow is up 1,090.12 points or 3.9 percent at 29,413.52 and the S&P 500 is up 93.41 points or 2.7 percent at 3,602.85. The tech-heavy Nasdaq is up a more modest 82.50 points or 0.7 percent at 11,977.3, as traders shift money out of some companies that benefited from the pandemic.

The rally on Wall Street comes following upbeat results from a phase 3 study of the coronavirus vaccine being developed by Pfizer (PFE) and BioNTech (BNTX).

Pfizer and BioNTech said an interim analysis of the results found the vaccine candidate to be more than 90 percent effective in preventing COVID-19 in participants without evidence of prior infection.

“Today is a great day for science and humanity,” said Pfizer Chairman and CEO Dr. Albert Bourla. “The first set of results from our Phase 3 COVID-19 vaccine trial provides the initial evidence of our vaccine’s ability to prevent COVID-19.”

The companies said they plan to submit the vaccine for regulatory approval in the U.S. and Europe soon after the required safety milestone is achieved, which is currently expected to occur in the third week of November.

The vaccine news added to positive sentiment generated in reaction to the weekend’s news that Democratic candidate Joe Biden’s is projected to win the presidential election.

Several major news organizations called the race for Biden on Saturday after projecting the former Vice President will win Pennsylvania and its 20 electoral votes.

The apparent victory for Biden potentially sets up a divided government, with control of the Senate likely to be decided by two run-off elections in Georgia.

However, President Donald Trump has refused to concede the race, alleging widespread voter fraud and launching legal challenges in several key states.

Sector News

Cruise operators Carnival Corp. (CCL), Norwegian Cruise Line (NCLH) and Royal Caribbean (RCL) are skyrocketing on the upbeat coronavirus vaccine news.

Substantial strength also remains visible among airline stocks, as reflected by the 17.4 percent spike by the NYSE Arca Airline Index. The index soared to its highest intraday level in eight months in early trading.

Energy stocks have also moved sharply higher along with the price of crude oil, with crude for December delivery jumping $3.17 to $40.31 a barrel.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index is up by 16.5 percent and the NYSE Arca Oil Index is up by 16 percent.

Financial, commercial real estate, and chemical stocks are also seeing considerable strength, moving higher along with most of the other major sectors.

Meanwhile, gold stocks are among the few sectors bucking the uptrend, with the NYSE Arca Gold Bugs Index plunging by 8.4 percent.

The sell-off by gold stocks comes amid a steep drop by the price of the precious metal, as gold for December delivery is plummeting $99.10 to $1,852.60 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved significantly higher during trading on Monday. Japan’s Nikkei 225 Index surged up by 2.1 percent, while China’s Shanghai Composite Index jumped by 1.9 percent.

The major European markets also skyrocketed on the day. While the French CAC 40 Index soared by 7.6 percent, the German DAX Index and the U.K.’s FTSE 100 Index spiked by 4.9 percent and 4.7 percent, respectively.

In the bond market, treasuries have moved sharply lower following the coronavirus vaccine news. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 13.1 basis points at 0.951 percent.

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