The Dow Jones and S&P 500 rallied on Monday as investors were encouraged by preliminary trial data from drugmakers Pfizer (PFE ) and BioNTech (BTNX ) demonstrated that their potential coronavirus vaccine is more than 90% effective. Conversely, the Nasdaq dipped during the session as investors moved money away from technology stocks and into cyclicals. The announcement boosted sentiment, signaling that the pharmaceutical industry may soon have a way to control the coronavirus pandemic and thus benefiting the global economy.
Monday's session also market the first day of trading following the U.S. presidential election results projecting that former vice president Joe Biden will be the 46th president of the United States. The call came four days after Election Day, amid close counts in several battleground states. However, President Donald Trump has refused to concede at this time as has begun legal battles and called for ballot recounts in multiple states. Trump will be president until January 20, 2021.
Here's how the market settled to open the week:
S&P 500 Index (SPY ): +1.17% or +41.08 points to 3,550.52
Dow Jones Industrial Average (DIA ): +2.95% or +834.57 points to 29,157.97
Nasdaq Composite Index (QQQ ): -1.53% or -181.45 points to 11,713.78
For Major Stock News, reopening and beaten down cyclical names rallied following positive coronavirus vaccine news: AMC Entertainment (AMC ), American Airlines (AAL ), Carnival (CCL ), Norwegian Cruise (NCLH ), Royal Caribbean (RCL ), Southwest Airlines (LUV ) and United Airlines (UAL ). Big banks also rose--Bank of America (BAC ), Citigroup (C ), Goldman Sachs (GS ), JPMorgan (JPM ) and Morgan Stanley (MS )--and energy giants skyrocketed higher--ExxonMobil (XOM ), Chevron (CVX ), National-Oilwell Varco (NOV ) and Valero Energy (VLO ). Stocks that were harmed amid Monday's rally were stay-at-home names like Amazon (AMZN ), Netflix (NFLX ), Teladoc (TDOC ) and Zoom Video (ZM ).
For Sector Performance, cyclical stocks rose as traders turned away from technology stocks. Energy (XLE ) exploded over 14% as positive vaccine outlook shook off demand fears. Following Energy's lead, Financials (XLF ) surged 8% while Industrials (XLI ), Real Estate (XLRE ) and Materials (XLB ) gained over 2%. Meanwhile, megacaps Communication Services (XLC ) and Information Technology (XLK ) slipped lower, while Consumer Discretionary (XLY ) was the biggest loser, dropping over 1%.
For Commodities and Currency, the U.S. Dollar (UUP ) was relatively unchanged on Monday against other global currencies as investors leaned more to riskier currencies as the U.S. election rally merged with positive vaccine news, but prolonged coronavirus fears and possible election result disputes kept greenback selloffs in check. Gold (GLD ) prices fell lower as market participants moved towards risker assets. Spot gold dropped 4.8% at $1,857.61 per ounce, while gold futures settled 5% lower at $1,854.40 per ounce. Crude oil futures surged substantially higher on Monday as the coronavirus vaccine rally boosted demand outlooks for energy. International benchmark Brent Crude (BNO ) gained 7.9% at $42.56 per barrel, while West Texas Intermediate (USO ) was up 8.5% at $40.29 each. Both contracts had risen more than $4 earlier in the session as risk asset appetites grew.
For Tuesday, investors will pay attention to job openings data for September.