NEW YORK (Reuters) - U.S. stocks jumped on Monday, and the S&P 500 closed at a 10-week high, on encouraging early-stage data for a potential coronavirus vaccine and on the promise of more stimulus to lift an economy beaten down by the pandemic.
Drugmaker Moderna Inc MRNA.O surged 19.96% after the company said its experimental COVID-19 vaccine showed promising results in a small early-stage trial.
After rallying more than 32% from a multi-year low hit in March, the S&P 500 had been trading in a tight range in May as investors weighed the hopes of an economic recovery against the fears of another wave of infection as states lifted virus-led restrictions.
“The fact that Moderna came out with the Phase 1 trial that seems to be positive, that certainly is igniting the storm,” said Ken Polcari, chief market strategist at SlateStone Wealth LLC in Jupiter, Florida. “That will ignite the storm because if there is a vaccine then all this uncertainty about the economy and the virus goes away.”
Stocks that have been particularly battered by government lockdown measures implemented to stem the spread of the coronavirus surged on Monday.
Travel-related stocks were among the biggest gainers, with cruise line operators Carnival Corp CCL.N, Royal Caribbean Cruises Ltd RCL.N and Norwegian Cruise Line Holdings Ltd NCLH.N all outperforming the broader market with gains of at least 15%.
The Dow Jones Industrial Average .DJI rose 911.95 points, or 3.85%, to 24,597.37, the S&P 500 .SPX gained 90.21 points, or 3.15%, to 2,953.91 and the Nasdaq Composite .IXIC added 220.27 points, or 2.44%, to 9,234.83.
The benchmark S&P 500 notched its biggest one-day percentage gain since April 8, with all 11 major S&P sectors higher.
Markets also took heart from comments by Federal Reserve Chair Jerome Powell over the weekend forecasting a gradual economic recovery and his affirmation that more monetary stimulus would be on the way if required. Powell is set to speak before the Senate Banking Committee on Tuesday to discuss how economic rescue efforts are working.
Still, stocks that are poised to benefit the most from a restart of the economy continue to lag those whose businesses have weathered the restrictions or even grown as a result of the lockdowns. The S&P 500 growth index .IGX has outperformed the S&P value index .IVX by about 4 percentage points this month.
General Motors Co GM.N and Ford Motor Co F.N both surged, closing up 9.63% and 8.37%, respectively, as the two automakers started to reopen their North American factories in a push to restart work in an industry that accounts for about 6% of U.S. economic activity and employs nearly 1 million people in the United States.
Advancing issues outnumbered declining ones on the NYSE by a 7.12-to-1 ratio; on Nasdaq, a 4.43-to-1 ratio favored advancers.
The S&P 500 posted 22 new 52-week highs and no new lows; the Nasdaq Composite recorded 88 new highs and seven new lows.
Volume on U.S. exchanges was 12.63 billion shares, compared to the 11.4 billion average for the full session over the last 20 trading days.
Reporting by Chuck Mikolajczak; Editing by Leslie Adler
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