Stocks rise broadly as Pfizer vaccine gains FDA approval
Stocks closed higher on Wall Street on Monday, pushing the Nasdaq composite to an all-time high and helping the Standard & Poor’s 500 index more than make up for its losses last week.
The S&P 500 rose 0.9% after spending much of the day within striking distance of its own record high, set a week ago. The benchmark index ended less than 0.2% below that mark.
Technology, communication and financial stocks helped lift the S&P 500. Companies that rely on consumer spending also rose. Energy stocks rallied as the price of U.S. crude oil jumped 5.3%, recovering some of the ground it lost last week. Only utilities, household goods makers and real estate companies fell. Treasury yields were mixed.
Pfizer rose 2.5% after the Food and Drug Administration gave full approval to its COVID-19 vaccine. The vaccine had been under an emergency use authorization since December, but the full approval could persuade some reluctant Americans to now get their shot and will probably give local authorities the legal backing to impose vaccine mandates.
BioNTech, a German drug manufacturer that developed the vaccine with Pfizer, jumped 9.6% on the news. Moderna, which developed a similar vaccine that uses the same technology, vaulted 7.5%.
The prospects of more vaccinations and signs of some easing in the growth rate of coronavirus cases helped put investors in a buying mood, said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute.
Hopefully, the FDA approval “increases the uptake of the vaccine,” Samana said. The market’s gains “shouldn’t be viewed as anything other than a vaccine rally.”
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The S&P 500 rose 37.86 points to 4,479.53. The Dow Jones industrial average added 215.63 points, or 0.6%, to close at 35,335.71. The Nasdaq gained 227.99 points, or 1.5%, ending at 14,942.65 and eclipsing its last all-time high set early this month.
Small-company stocks outgained the broader market. The Russell 2000 index picked up 40.70 points, or 1.9%, to close at 2,208.30.
Bond yields mostly fell. The 10-year Treasury yield slipped to 1.25% from 1.26% late Friday.
The market remains in a summer slowdown, with late August being historically one of the slowest times for trading with the exception of the Christmas holiday season. Markets are expected to pick up in volume and volatility after the Labor Day weekend.
Investors will be looking to the Federal Reserve as the Kansas City Fed’s annual conference in Jackson Hole, Wyo., starts this week. It will probably provide Wall Street with more insight into what the Fed may do about inflation.
Last week, minutes from the most recent Fed meeting showed that policymakers had discussed reducing the central bank’s bond-buying program later this year to start winding down some of the emergency measures implemented during the pandemic. They stopped short of setting a firm timeline.
In economic news, sales of previously occupied homes rose from June to July at a faster-than-expected pace of 5.99 million, more than the 5.82 million that economists were expecting. Still, sales increased by only 1.5% from July 2020, a more modest annual gain than it recent quarters. Home builders fell broadly after the report. Los Angeles-based KB Home fell 1.1%.