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Stocks hit another set of records on Monday as alarming rates of COVID-19 infection and hospitalizations in the United States were overshadowed by promising vaccine developments.
Least-loved sectors and industries received a boost as investors shunned stocks of companies that were thriving in the containment environment created by the pandemic.
What did the main benchmarks do?
The Dow Jones Industrial Average DJIA,
climbed 470.63 points, or 1.6%, to end at a record high of 29,952.22, after setting a new intraday high, to clinch its first record since February 2. The blue-chip index finished just 50 points from a milestone at 30,000.
The S&P 500 SPX,
gained 41.76 points, or 1.2%, to close at a record 3,626.91. The Nasdaq Composite COMP,
rose 94.84 points, or 0.8%, ending at 11,924.13, its third-highest close on record.
The small cap Russell 2000 RUT,
also rose 2.1% to end at a record 1,785.34.
It was the first time the Dow Jones, S&P 500 and Russell 2000 had each set new close records on the same day since Jan. 22, 2018, according to Dow Jones Market Data.
Read: Dow records fastest bear market recovery in 30 years
In a chart: Small-cap stocks ‘remain pretty seriously underappreciated’ despite vaccine-fueled gains
What drove the market?
The “great rotation” from growth-oriented tech stocks to downtrodden stocks of companies that make goods and provide services, linking them to the U.S. economic recovery, deepened on Monday.
“The value is swinging and rolling and it’s up because of the vaccine news,” said Kent Engelke, chief economic strategist at Capitol Securities Management. “It shows, at least in my view, the underlying strength that could come back into the economy.”
Modern
mRNA,
declared its experimental COVID-19 vaccine reduce COVID-19 infections by 94.5%. The company said it plans to submit an emergency use authorization with the US Food and Drug Administration in the coming weeks. Moderna shares rose 9.6%.
Last week’s rally was inspired after Pfizer PFE,
and BioNTech SE BNTX,
on November 9, announced that its candidate vaccine was more than 90% effective in preventing COVID-19 infections in a late-stage trial.
“A vaccine was a dream in March, it’s a near reality today. It may not help during the current outbreak, but it promises relief by mid-2021,” James said. Meyer, chief investment officer at Tower Bridge Advisors.
The US is averaging 150,000 new cases a day, a staggering 81% increase from the average two weeks ago, according to a New York Times trackerand a trajectory that Peter Hotez, dean of the National School of Tropical Medicine and professor of pediatrics and molecular virology and microbiology at Baylor College of Medicine called an “imminent humanitarian disaster“, on CNN.
Even Sweden, known for its lax social distancing requirements compared to its Nordic neighbors, changed course and ordered a ban on public events more than eight people.
Technology shares and other beneficiaries at home collapsed again on Monday after lagging last week, but hard-hit industries and sectors including airlines, energy, finance and retail have benefited.
Read: Stock investors are ‘going through 3 transitions’ and short-term volatility can be ‘heartbreaking’
Deal-related news was also a focus, PNC Financial Services Group Inc.
cabin crew,
agreed to buy the American branch of the Spanish BBVA in an $11.6 billion transaction, the companies said Monday, in one of the biggest bank reconciliations since the financial crisis. PNC shares rose 2.9%, while BBVA shares jumped 12.6%.
Meanwhile, investors looked past what could be a difficult time due to the spread of COVID-19 and a stalled power transition, with President Donald Trump continuing to refuse to accept the results of the November 3 presidential election.
Read: Dates to watch as Trump continues legal fight to overturn presidential election result
President-elect Joe Biden spoke on Monday after meeting with U.S. business leaders on economic recovery. “We are entering a very dark winter,” Biden said, while stressing the need for infrastructure spending that creates jobs, as well as for Congress to come together and provide additional and urgent funding to states, cities and towns. to frontline workers during the pandemic.
“The S&P 500 is having its best November in decades,” Lindsey Bell, chief investment strategist for Ally Invest, said in an emailed comment.
But Bell also said it was unclear whether vaccine hopes would bolster consumer spending over the holidays “a crucial time” that “could provide clues as to what the next stage of economic recovery will look like”. .
On Monday, Federal Reserve Vice Chairman Richard Clarida describes a new set of employment measures to be used by the central bank, including labor force participation, to determine when the economy has returned to peak employment and when to consider raising interest rates from their current range between 0 % and 0.25%. Clarida also said that he was not affected by the recent increase in government bond yields.
In economic data, New York Federal Reserve Empire State Index came in at a reading of 6.3 from 10.5 in October.
Which companies were targeted?
-
Retailers got a boost on Monday vaccine hopes, helping push stocks to strong monthly gains, including those of Nordstrom Inc.
JWN,
+37.82% ,
Macy’s Inc., JC Penney Co. Inc.. JCPNQ,
Gap inc.. gps,
+5.43%
and others. -
Apple Inc.. AAPL,
+2.06%
shares gained 0.9%, even against two strategic privacy complaints in Europe by Max Schrems, a digital activist who successfully adopted Facebook’s user data practices. -
Tyson Foods Inc.
TSN,
+1.29%
The stock rose 3.8% after the meat processor announced fiscal fourth-quarter results that beat expectations and declared a fiscal 2021 dividend. -
Hilton Worldwide Holdings Inc.. HLT,
+2.63%
said monday it will offer $1 billion of senior notes to redeem previously issued debt. The stock gained 0.7%. -
Developer of high-end shopping centers Taubman Centers Inc. agreed to accept a price reduction in its recovery by Simon Real Estate Group Inc. SPG, in a move that will allow the companies to avoid a lengthy legal battle that was due to start on Monday. Simon will pay $43 per share for Taubman under the new deal, they announced on Sunday. This is down from the original price of $52.50. Shares of Simon rose 5.7%, while shares of Taubman climbed 8.5%.
-
Casper Sleep Inc.
CSPR
shares fell 13.6% after the boxed mattress seller saw a larger than expected loss in the third quarter due to an unexpected drop in income. Casper cited supply chain challenges as a result of the COVID-19 pandemic.
How have other assets traded?
The return on the 10-year treasury bill
TMUBMUSD10Y,
rose 1.4 basis points to 0.906%. Bond prices move in the opposite direction of yields.
The ICE US Dollar Index DXY,
an indicator of the greenback’s strength against its major rivals, was down 0.2%.
The pan-European Stoxx 600 SXXP index,
closed up 1.2%, while Britain’s FTSE 100 UKX index,
Z00,
climbed 1.7%.
Crude oil futures rosewith the American reference CLZ20
ending up 3% at $41.34 a barrel. Meanwhile, gold futures
GCZ20
increased by $1.60. or 0.8%, to close at $1,887.80 an ounce.
—William Watts contributed reporting
