MercoPress. South Atlantic News Agency

Dow Jones in record highs on news of another promising Covid-19 vaccine

Moderna Inc said its experimental Covid-19 vaccine was 94.5% effective in preventing infection based on interim late-state data

The S&P 500 and Dow Jones industrial average notched record closing highs on Monday as news of another promising coronavirus vaccine fanned hopes of eradicating Covid-19, while spiking infections and new shutdowns threatened to hobble a recovery from the pandemic recession.

All three major US stock indexes advanced and with its new closing record, the blue-chip Dow is the last of the three to reclaim levels reached in February, before lockdowns sent the markets into free-fall.

The Russell 2000 also hit an all-time closing high. Value, cyclical and small cap shares outperformed the broader market.

Moderna Inc said its experimental Covid-19 vaccine was 94.5% effective in preventing infection based on interim late-state data. It was the second drugmaker in as many weeks, after Pfizer Inc, to announce promising trial data in the development of a vaccine to defeat the pandemic. Its shares gained 9.6% on the day.

Combined, pending further data and regulatory review, the United States could have as many as 60 million emergency doses available this year.

“More vaccine news is driving cyclical, small caps and value, which would be primed if the economy reopens sooner than expected, returning us to some sense of normalcy,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

Travel-related stocks, which have been clobbered by restrictions to contain the pandemic’s spread, were in demand.

Shares of United Airlines Holdings Inc, American Airlines Group Inc, Carnival Corp and Norwegian Cruise Line Holdings Ltd jumped between 4.5% and 9.7%.

But Covid-19 continued its US rampage, with cases surging past 11 million and record infections in 40 states, prompting states to tighten social distancing mandates.

“Wall Street is looking out six to 12 months down the road,” Pavlik added. “There is a question about ... what kind of damage will be inflicted on the economy between now and then.”

The Dow Jones Industrial Average rose 470.63 points, or 1.6%, to 29,950.44; the S&P 500 gained 41.76 points, or 1.16%, at 3,626.91; and the Nasdaq Composite added 94.84 points, or 0.8%, at 11,924.13.

Of the 11 major sectors of the S&P 500, all but healthcare ended the session in the black, with energy stocks enjoying the largest percentage gain.