Stock markets jumped higher on Monday on news that a secondvaccine showed promise, bolstering hopes even as new infections surged around the world.
Pharmaceutical company Moderna said its vaccine appears to be 94.5% effective, according to preliminary data. Markets rallied as they did when Pfizer and BioNTech said earlier this month that their vaccine is 90% effective against the virus.
The S&P 500 gained 42 points, or 1.2%, to close at 3,627 as the broad-based index carried its momentum from last week to push deeper into record terrain. The Dow also notched a new record, jumping 471 points, or 1.6%, to end at 29,950. The tech-heavy Nasdaq rose 0.8%. Moderna shares added $6.39, or more than 7%, and have risen 47% this year.
Dr. Stephen Hoge, Moderna's president, welcomed the "really important milestone" but said having similar results from two different companies is what's most reassuring.
"That should give us all hope that actually a vaccine is going to be able to stop this pandemic and hopefully get us back to our lives," Hoge told The Associated Press.
"The vaccine news also allows businesses to plan for the future with greater certainty in terms of hiring and investment," said Steven Friedman, senior economist at investor adviser MacKay Shields, in an email. "And the greater certainty could influence smaller businesses that have struggled during the pandemic and are considering whether to remain in operation."
Both the Moderna and Pfizer-BioNTech vaccines are expected to get emergency approval from the Food and Drug Administration "in the coming weeks," according to Bank of America analysts.
Yet while Moderna's announcement offers hope that a vaccine could arrive soon, "additional data such as extended safety, durability, transmission rates and decreased hospitalizations are key data points still missing," the analysts said in a report.
The head of the World Health Organization also said Monday that a vaccine would not by itself. "A vaccine will complement the other tools we have, not replace them," director-general Tedros Adhanom Ghebreyesus said. "A vaccine on its own will not end the pandemic."
Pact forms world's biggest trading bloc
Markets were also boosted as investors welcomed the signing on Sunday of an agreement establishing the world's biggest trade bloc, a group of 15 countries that includes China, Japan, South Korea, 10 countries in Southeast Asia, New Zealand and Australia. The United States, the No. 1 economy, is not a part of it.
Called the Regional Comprehensive Economic Partnership, the pact mostly will bring already low tariffs lower over a 20-year period. It is expected to have a positive but incremental impact on trade in the region.
"The fact that the agreement got over the line after eight years of negotiation between a widely disparate group of nations is an achievement in itself," Jeffrey Halley of Oanda said in a commentary.