Positive news on a COVID-19 vaccine trial injected a jolt of energy into stocks, driving the Dow up more than 800 points Monday as the S&P 500 closed just shy of a record high.
Investors sensed that the recovery from the health crisis was in sight after Pfizer and its German partner BioNTech said a large scale late-stage trial of their vaccine showed it was more than 90% effective in preventing the new coronavirus.
That news fueled stocks in hard-hit, economically-sensitive sectors such as energy and banks. News of Joe Biden’s victory in the presidential elections also was a reassuring confirmation of what investors had been counting on at the end of last week.
The Dow gained nearly 3% Monday. The S&P 500 added more than 1%. But the Nasdaq fell one-and-a-half percent as investors sold off stocks like Amazon that had outperformed during the pandemic.
Victory Capital Management president Mannik Dhillon said the sector rotation will help extend the market rally.
“You see a tremendous shift from growth to value and from large and mega-cap to small. That’s the rotation everyone’s been waiting for. That part of the market has been forgotten for so long. So if that sentiment continues to drive the performance, I think we can continue to see it.”
Companies hardest hit by the travel bans and lockdowns soared. United Airlines jumped 19%. Cruise operator Carnival rose nearly 40%.
But stay-at-home winners declined. Exercise bike maker Peloton skidded 20% and Zoom Video fell 17%.