Published: November 13th, 2020
Monday, November 9, was a wild day on Wall Street. Stocks surged after Pfizer announced that its COVID-19 vaccine is 90% effective. The Dow closed the day almost 900 points up or almost 3%, while the S&P 500 Index climbed up by 1.2%.
The announcement by Pfizer, an American multinational pharma, that its COVID-19 vaccine candidate is more than 90% effective ignited a massive Wall Street rally on Monday, November 9. Investors seized the opportunity to rotate back to stocks that suffered the most because of the pandemic.
The Dow Jones Industrial Average, Nasdaq, and S&P 500 reached intraday record highs on the session. Overall, the Dow closed the day nearly 3% up or 835 points after climbing by more than 1,600 points during the morning session.
This performance is the index's best showing since June and is just slightly short of the all-time high closing it recorded in February.
Chief market strategist for LPL Financial, Ryan Derrick, told customers in an email that the strong results ignited by Pfizer's announcement are better than anyone expected. He added that they (the numbers) mean that his company can get its operations back to normal sooner than expected.
An executive at JPMorgan echoed Ryan's opinion. In a circular to its customers, the multinational investment bank said that given the stock market's energy, it expects the S&P 500 Index to surge past the previously forecasted target of 3,600 points by the end of the year.
Instead, it might climb to 4,000 in Q1 of 2021 and up to 4,500 by the end of next year. Along with an economy on course to recovery, Ryan said the situation could make for a better 2021.
Despite an earlier rally, the Nasdaq did not manage to keep the gains from the morning session. The tech-laden index lost out as many tech stocks profited from the stay-at-home restrictions dived into the red. Overall, it closed the day down 1.5% but remained slightly below its September record.
Pfizer's announcement indicating that their vaccine candidate is 90% effective is better than expected. And the breakthrough is precisely what Wall Street has been craving. The coronavirus pandemic has brought untold economic turmoil to the global economy. The cases are surging everywhere, and the U.S. sees a record-high number of new infections.
The current situation threatens to turn the scales against the norm and throw the U.S. economy in the wrong direction one more time.
Though the vaccine is not yet ready for countrywide administration, Pfizer said it plans to request emergency use authorization from the regulation, Food and Drug Administration (FDA) of the U.S. However, Pfizer's announcement added that such a request would have to wait for another two months because it has to monitor volunteers for a similar period after administering the second dose of the vaccine.
Albert Bourla, the giant U.S. pharma's CEO, said his company expects to have about 1.3 billion doses of the vaccine ready for global distribution in 2021. The figures are on top of the 50 million doses it plans to distribute before year's end. The CEO added that two lines in Europe and the U.S. would make the vaccine.
Pfizer was among the companies whose stocks soared on Monday, closing almost 8% up. Seemingly, the news was good for pharma stocks in general. Johnson & Johnson and Merck & Co., all components of the Dow, jumped before the bell.
Shares of BioNTech, the German biotech company that is partnering with Pfizer on the coronavirus vaccine initiative, shot up almost 14%.
Seemingly, the sentiment benefitted the companies that suffered from the pandemic the most. Cruise lines Carnival and Norwegian saw their stocks climb, as did the equities of airlines. Carnival Corp. was up 39.3%, while Southwest Airline's stocks jumped 9.7%. United and Delta also recorded double-digit rises.
Walt Disney Company also benefitted. The mass media and entertainment conglomerate's shares shot up almost 12% as investors gambled that a vaccine might make its many amusement parks accessible again.
Banks' stocks also recovered probably on investor hopes that a swifter return to regular economic activity is now feasible. Bank of America and JPMorgan Chase shot up 14.2% and 13.5%, respectively, while Citigroup closed the day 11.5% higher.
Another major gainer, AMC, an American multinational cable television channel, rose 51%. The company was on the verge of bankruptcy after revenue plunged more than 90% in Q3 of 2020.
Energy stocks also surged sharply following an increase in oil prices after the vaccine news fueled economic recovery optimism. Chevron, Exxon Mobil, Valero Energy, and National Oilwell all recorded double-digit gains.
Zoom closed the day about 17% lower as Amazon shed off 5.1%. Overall, stay-at-home stocks tumbled as the market shifted back to the beaten-down, cyclical names. However, the two stocks are still considerably higher year-on-year. Zoom has gained more than 500% for 2020.
Facebook, Apple, and Netflix also lost ground during Monday, November 9, trading.
Biogen stock dropped by 30% following a rejection of its human monoclonal antibody drug, aducanumab, by the FDA. Several Wall Street benchmarks also downgraded the company's stocks. Atlantic Equities demoted its stocks from neutral to underweight.
Beyond Meat also lost 4.1% after McDonald's announced that it would launch a meat-free burger in several markets in 2021. The vegan burger maker's horrible Q3 earnings also spooked investors.
Wall Street started the week beginning Monday, November 9, highly following Pfizer's news that its vaccine candidate is 90% effective. The news, which is better than forecasted, pushed the Dow more than 1,600 points in intraday trade before settling at 835 points up for the day. Big pharma, banks, airlines, and entertainment companies' stocks were the big beneficiaries. In contrast, stay-at-home stock recorded surprise declines on a day that most indexes came close to breaking their all-time high records.