Stocks rose on Monday, building on last week’s strong performance, as hope for a potential coronavirus vaccine helped investors look past past record Covid numbers from the weekend.
The Dow Jones Industrial Average jumped 467 points, or 1.8%. The S&P 500 gained 1.3% and the Nasdaq Composite advanced 1.6%. The Nasdaq-100 — which is made up of the 100-largest nonfinancial companies in the composite — surged 1.8% to break above 11,000 for the first time.
Nine of the 11 S&P 500 sectors traded higher, with consumer discretionary and health care both climbing more than 2%. Monday’s gains put the S&P 500 down less than 0.1% for 2020.
Pfizer and German biotech BioNTech SE were granted fast track designation by the FDA for two of the companies’ four vaccine candidates against the coronavirus. Pfizer shares added 5.3%. BioNTech jumped 15.2%.
Pfizer and BioNTech said they expect to start the next phase of the vaccine trial later this month with 30,000 subjects. The companies expect to have 100 million doses of a vaccine by the end of 2020 and more than 1.2 billion doses by the end of 2021, according to a release.
The news on BioNTech and Pfizer’s vaccine candidates came after Florida reported 15,299 new coronavirus cases on Sunday, the highest single day total for any U.S. state since the pandemic began. Meanwhile, the U.S. has reported more than 60,000 new cases daily for three days in a row now, bringing the national total to more than 3 million cases, according to data from Johns Hopkins University.
“COVID remains a huge problem w/cases, hospitalizations, and fatalities all climbing,” Vital Knowledge founder Adam Crisafulli said in a note on Sunday. “The market continues to absorb all this information relatively well and this seems to be a function of vaccine hopes, lower fatality rates vs. Mar/April, the avoidance of wholesale lockdowns, and the lack of a resurgence in the Northeast (esp. NYC).”
Key technology shares climbed, continuing their mystifying run as investors bet on their resilience during the coronavirus. Facebook, Amazon and Netflix were higher. Tesla jumped 12.5% to an all-time high, making it the 10th-biggest U.S. stock by market capitalization. Analysts at Wedbush and Morgan Stanley raised their price targets on Apple, sending the stock up 1.9%.
Chip stocks increased after Analog Devices offered to buy Maxim Integrated in a $21 billion all-stock deal. Maxim jumped 11%.
The Dow and the S&P 500 are coming off two consecutive weeks of gains, while the resilience in tech shares pushed the Nasdaq to a new record after three straight positive weeks. For July, the Dow and the S&P 500 have risen 1.0% and 2.7%, respectively. The tech-heavy Nasdaq outperformed, climbing 10.7% this month as Amazon, Apple, Netflix, Alphabet all reclaimed new highs.
“The overall rally is still very narrow…and several of the high flying mega-cap stocks are becoming overbought (and more over-valued),” Matthew Maley, chief market strategist at Miller Tabak, said in a note on Sunday. “Therefore, we HAVE to wait to see if the key resistance level on the S&P is indeed broken to the upside before we can confirm that another rally leg in the broad stock market has begun.”
Earnings season kicked off on Monday with PepsiCo reporting better-than-expected results. The stock climbed more than 0.5%. JPMorgan, Citigroup and Wells Fargo are scheduled to report on Tuesday.
Corporate profits are expected to fall by 44% in the second quarter, which would be the biggest drop in quarterly earnings since the fourth quarter of 2008, according to Refinitiv data. However, the market could shrug off the sharp profit decline as long as companies signal a recovery on the horizon.
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