The Dow soared to a record high Monday after Moderna (MRNA) became the latest major drug-maker to announce upbeat data for its COVID-19 vaccine candidate, building on hopes that an effective inoculation will soon be available.
The Dow rose more than 450 points, or 1.5%, topping its previous record intraday high of 29,933.83 from Nov. 9. The S&P 500 also increased, while the Nasdaq hugged the flat line. Shares of airlines, cruise lines, hotels, and restaurant companies surged anew as the latest vaccine data suggested consumers might return more enthusiastically to these businesses. Moderna’s stock jumped more than 9% to a record high shortly after market open.
Moderna said Monday that preliminary data from its late-stage clinical trial showed its vaccine candidate was 94.5% effective in preventing COVID-19 in participants. That followed Pfizer’s (PFE) announcement last week that its own vaccine candidate, which uses similar new messenger RNA technology, had an efficacy rate of more than 90%, or well above what many public health officials had been expecting.
Traders looked beyond the increasingly dire coronavirus situation in the U.S., as hopes that a vaccine would be approved and distributed in the near-term helped to assuage some fears. The S&P 500 jumped to an all-time closing high on Friday as each of the three major indices posted weekly gains. Stocks and sectors that were hardest-hit by the pandemic made up some ground after lagging for the year-to-date, while tech stocks underperformed. Shares of Zoom Video Communications (ZM), Slack (WORK) and Netflix (NFLX) were each pressured.
“As we hear more positive news on the COVID-19 vaccine, the overblown work-from-home trade is beginning to unwind because some of those stocks had baked in no vaccine at all,” David Trainer, CEO of investment research firm New Constructs, said in an email Monday morning. “The rotation into value stocks that started last week will continue.”
But with a vaccine still unlikely to be available en masse for months, the pandemic remains a present threat.
The U.S. topped the grim milestone of 11 million coronavirus cases as of Sunday as deaths approached 250,000, according to data from Johns Hopkins. An average of nearly 150,000 new infections have been reported per day in the U.S. over the past week, for a sharp increase after first crossing the 100,000 mark for the first time during the pandemic earlier this month.
In recent days, more cities and states have added curfews and tightened their restrictions on daily activities as case counts soar. New Jersey’s new daily COVID-19 cases hit a record high on Saturday, and Illinois and Ohio both saw record numbers of new cases on Friday. Chicago posted a stay-at-home advisory late last week, and New York state had a new 10 p.m. curfew on bars, restaurants and gyms go into effect Friday. Oregon ordered a two-week “freeze” on non-essential business activity and large social gatherings, with Gov. Kate Brown warning of fines or arrests for violations.
“The story of the next few weeks will be a gradual and uneven—but unambiguous—tightening of anti-COVID restrictions across the country,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, said in a note Sunday. “The rapid rate of growth of cases and infections threatens to overwhelm the hospital system by the end of the year, at which point current trends suggest that perhaps 250K people will be hospitalized with Covid, with about 60K in ICUs.”
“Politicians, therefore, will have no choice but to respond to the unfolding nightmare in hospitals,” he added. “They will restrict activity in the leisure and hospitality sector— perhaps closing bars and restaurants completely in the hardest-hit cities—and by limiting indoor gatherings, in homes and elsewhere. These measures work, but they exact a real cost on the economy.”
11:24 a.m. ET: Dow touches fresh record intraday high
The three major averages rose intraday on Monday. The Dow outperformed, as shares of components that had been pressured earlier this year including Boeing and Chevron surged.
The Dow added 456 points, or nearly 1.6%, as of 11:24 a.m. ET. The S&P 500 rose 1.2% as cruise lines including Carnival Corp. and Royal Caribbean Cruises rallied, and the energy, industrials and financials sectors outperformed. The Nasdaq increased 0.8%, or 89 points.
11:07 a.m. ET: Bank of America raises Moderna price target to $105 from $85; reiterates Neutral rating
Analysts from Bank of America raised their price target on shares of Moderna by $20 to $105 on Monday. However, they maintained a Neutral rating on the stock, “On what we see as the majority of COVID-19 value already well-reflected in shares,” they said.
Approval of an emergency use authorization from the Food and Drug Administration will “potentially” come before year-end for both Moderna and Pfizer, the analysts added. Full biologics license applications approval will likely take longer as more safety follow-up data will be needed.
“This would put BLA filing on track for 2Q21, with full approval potentially coming shortly thereafter, in-line with our current view of broad access in mid-2021,” they said.
Moderna’s vaccine will likely have the upper hand over Pfizer’s, they added, since Moderna’s vaccine requires storage of between 4 and -20 degrees Celsius, versus -70 degrees Celsius for Pfizer’s.
9:30 a.m. ET: Dow opens sharply higher as vaccine hopes surge
Here were the main moves in markets, as of 9:31 a.m. ET:
S&P 500 (^GSPC): +26.95 points (+0.75%) to 3,612.1
Dow (^DJI): +356.09 points (+1.2%) to 29,935.90
Nasdaq (^IXIC): +12.56 points (+0.11%) to 11,842.5
Crude (CL=F): +$1.84 (+4.59%) to $41.97 a barrel
Gold (GC=F): -$0.3 (-0.02%) to $1,885.90 per ounce
10-year Treasury (^TNX): +1.1 bps to yield 0.904%
8:30 a.m. ET: Manufacturing activity in New York expands at slowest rate since August
Regional manufacturing activity in New York expanded at the slowest pace in three months in November, according to the Empire Manufacturing State Manufacturing Survey.
The headline index fell to 6.3 for the month from 10.5 in October, sharply missing consensus expectations for a rise to 13.5. This marked the third straight month of slowing growth for New York manufacturers.
In November, subindices tracking new orders and shipments each increased over October, while inventories decreased and delivery times held steady. Employment levels rose month-over-month, and selling prices accelerated.
“Looking ahead, firms remained optimistic that conditions would improve over the next six months,” according to the report.
7:20 a.m. ET: Stock futures surge after Moderna’s efficacy data
Here were the main moves in markets, as of 7:20 a.m. ET:
S&P 500 futures (ES=F): 3,626.00, up 44 points or 1.23%
Dow futures (YM=F): 29,914.00, up 504 points or 1.7%
Nasdaq futures (NQ=F): 11,948.25, up 14.75 points or 0.42%
Crude (CL=F): +$1.49 (+3.71%) to $41.62 a barrel
Gold (GC=F): -$18.70 (-0.99%) to $1,867.50 per ounce
10-year Treasury (^TNX): +3.6 bps to yield 0.929%
7:15 a.m. ET: Monday: Moderna says vaccine candidate is 94.5% effective in preventing COVID-19
In a statement Monday, Moderna announced that its clinical trial data showed its vaccine candidate was 94.5% effective in preventing COVID-19 in participants.
Moderna’s trial, conducted alongside the National Institute of Allergy and infectious Diseases, had enrolled more than 30,000 participants in the U.S. The preliminary data included an analysis of 95 participants who had developed confirmed cases of COVID-19. Moderna said it intends to submit for an emergency use authorization with the Food and Drug Administration “in the coming weeks and anticipates having the EUA informed by the final safety and efficacy data (with a median duration of at least 2 months).”
By the end of the year, Moderna expects to have about 20 million doses of its vaccine, called mRNA -1273, ready to ship in the U.S. It also remains on track to produce between 500 million and 1 billion doses in 2021. Last week, Pfizer said it expected to produce 50 million doses of its own vaccine in 2020 and up to 1.3 billion doses in 2021.
6:05 p.m. ET Sunday: Stock futures open higher
Here were the main moves in markets, as of 6:05 p.m. ET Sunday evening:
S&P 500 futures (ES=F): 3,599.00, up 17 points or 0.47%
Dow futures (YM=F): 29,542.00, up 132 points or 0.45%
Nasdaq futures (NQ=F): 12,007.75, up 74.25 points or 0.62%