Another Streaming Option

By Nicholas Jasinski |  Tuesday, May 26

Momentum. The floor of the New York Stock Exchange reopened today to some traders observing physical distancing precautions. New York Governor Andrew Cuomo rang the opening bell as investors returned from the Memorial Day long weekend.

Bullish tailwinds continued to push stocks higher today. Count economic reopening progress, declining coronavirus cases and fatalities, and vaccine optimism as among the factors keeping the current rally going. A base of supportive fiscal and monetary policies and just simple momentum has Wall Street biased upward, despite the continued pain and suffering on Main Street.

On its 124th birthday, the Dow Jones Industrial Average rose 2.2%. The S&P 500 added 1.2%, the Nasdaq Composite ticked up 0.2%, and the Russell 2000 surged 2.8%.

Stocks of the most coronavirus-sensitive companies raced ahead, while many of 2020’s biggest winners lagged behind. That explained the small-cap Russell 2000's outperformance over the tech-heavy Nasdaq today.

Biotech company Novavax said it was beginning to enroll patients in a trial of its vaccine candidate. Pharma giant Merck also had positive news on the vaccine front.

None of it meant that a vaccine is close to ready for use or widespread distribution. But progress in that direction means a lot for various industries. A difference of just a few months in the hunt for a vaccine materially affects the fortunes of some of 2020's hardest-hit firms.

Take airlines, for example. The industry's shares are down 60% or more this year, as travel has ground to a halt and uncertainty about its return makes forecasting results impossible for analysts. News that a vaccine looks on track to arrive in a given quarter down the road could swing estimates of airlines' earnings from a heavy loss to something that resembles a resumption of flying.

That in turn has an impact on hotels, aerospace companies like Boeing, and many other areas of the market. 

Accordingly, travel and leisure stocks soared today. Shares of cruise line Carnival jumped 12.7%, hotel chain Marriott International gained 4.3%, and United Airlines Holdings surged 16.3%.

Economically sensitive bank shares also rallied after comments from JPMorgan Chase CEO Jamie Dimon. The influential banker said that despite pressure to cut them, dividends should remain a priority for companies, including banks. JPMorgan shares closed up 7.1%, Citigroup stock jumped 9.2%, Goldman Sachs gained 9%, and Morgan Stanley added 8.9%.