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Dow Moves Higher as Positive Vaccine News Renews Bets on Reopening Trade

·2-min read

By Yasin Ebrahim – Wall Street surged on Friday as investors swooped in to buy stocks tied to the progress of the economy following positive reports about a potential Covid-19 vaccine in the wake of a record-surge U.S. Covid cases.

The S&P 500 rose 0.44%, while the Nasdaq Composite was flat and the Dow Jones Industrial Average added 0.77%.

Gilead Sciences (NASDAQ:GILD) released data on Friday showing its antiviral drug, remdesivir, cut the risk of death for severely sick coronavirus patients by 62% compared with standard care alone, sending its shares up more than 2%.

Biontech (NASDAQ:BNTX), up 6%, also delivered positive news in the race of a vaccine, with CEO Ugur Sahin reportedly claiming the company could have a treatment ready for approval by December, according to the Wall Street Journal.

The promising update on a vaccine helped ease investor jitters over the rapid spread of coronavirus, which infected a record 60,565 people in the U.S. on Thursday.

Energy and financials, both of which had been under pressure this week, jumped more than 2%, pushing the broader market higher.

The rise in financials was underpinned by a swing higher in bank stocks ahead of earnings next week.

Citigroup (NYSE:C), JPMorgan (NYSE:JPM), and Wells Fargo (NYSE:WFC), all of which are set to report their second-quarter results on Tuesday, were up more than 2%.

Renewed action on the reopening trade - bullish bets on stocks tied to the progress of the economic reopening - also benefited airlines and cruise lines, with the latter benefiting from a surge in cruise operator Carnival (NYSE:CUK).

Carnival (NYSE:CCL) jumped 8.2% on Friday after the cruise operator said it was cutting capacity and indicated that demand for 2021 is growing.

Tech stocks, however, lagged the broader move higher, as investors appeared to lock in some profit in megacap tech stocks.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL) and (NASDAQ:AMZN), the so-called Fab 5, making up about 40% of the Nasdaq Index, were mostly in the red.