Monday, November 16, 2020

Stocks Get a Second Shot

 

By Alex Eule |  Monday, November 16

Vaccine, Part 2. For the second consecutive Monday, investors woke up to the best kind of news: An end to the pandemic, which continues to ravage the globe, is in sight. This morning, Moderna said its Covid-19 vaccine had been 94.5% effective in Phase 3 trials. That result was even better than the "more than 90% effective" figure that  Pfizer and BioNTech cited a week ago for their own vaccine candidate. 

Just like last week, investors reacted with rational glee. The Dow Jones Industrial Average rose 471 points, or 1.6%, while the S&P 500 was up 1.2%. The gains drove both indexes to close at all-time highs.

For the Dow, it had been 193 trading since its last record close, the longest drought since 2016. 

Unlike last week's vaccine rally, today's move also included gains for the tech-heavy Nasdaq Composite, which closed up 0.8%.

The standouts on the day included, of course, Moderna, which was up 9.6%, along with re-opening sensitive names like department store Nordstrom, (+10.9%), cruise operator Carnival ( +9.7%), and apparel retailer Gap (+9.5%). The other big moves came from the energy sector: TechnipFMC rose 12.2%, Schlumberger was up 11.3%, and National Oilwell Varco was up 9.7%. Crude oil was up 3% on the day, to $41.34 a barrel.

Shares of Pfizer and BioNTech's were among the rare losers, down 3.3% and 14%, respectively. The Moderna vaccine can be stored at typical refrigerator temperatures, easing distribution, while Pfizer's version currently needs to be kept at -70 degrees Celsius, far colder than a typical freezer. 

Bill Alpert has more about the vaccines on Barrons.com.

Late in the day, the S&P 500 shook up markets with an announcement that had nothing to do with vaccines at all. The index committee said it would finally be adding Tesla to the S&P 500 on Dec. 21. Tesla's bulls have been counting down the days until the nearly $400 billion market value company would earn its spot. When Tesla enters, it's likely to be among the 10 largest companies in the index. Here's more from Barron's Al Root.

 

 


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