U.S. Stock Futures Jump on Positive Vaccine Results
November 16 2020 - 8:01AM
Dow Jones News
By Mischa Frankl-Duval and Frances Yoon
U.S. stock futures rose on positive study results from another
potential Covid-19 vaccine, with the S&P 500 set to open higher
after ending last week at a record level.
Futures tied to the S&P 500 jumped 1%. Contracts tied to the
Dow Jones Industrial Average climbed 1.6%.
Moderna said its experimental coronavirus vaccine was 94.5%
effective at protecting people from Covid-19 in an early look at
pivotal study results, the second vaccine to hit a key
milestone.
Moderna shares jumped more than 10% in premarket trading.
Companies that stand to benefit from the reopening of the economy
also climbed, with United Airlines Holdings rising 7% and cruise
operator Royal Caribbean Group up 5.4%.
Companies that have benefited from stay-at-home orders slipped,
with Zoom Video Communications down 4.9% premarket and Peloton
Interactive down 3%.
Investors have recently been buoyed by the prospect of more
positive news on coronavirus shots, which could signal a return to
greater economic normality. News of a successful trial from Pfizer
and BioNTech jolted markets last week.
Despite the vaccine news, a rally in stocks could prove choppy
as investors work out how long it could take for the economy to
benefit from a successful inoculation, said James Athey a senior
investment manager at Aberdeen Standard Investments.
"There's a long way to go between Phase III results and a normal
economy, " he said.
Moderna's results didn't change the consensus timeline for the
rollout of a vaccine, Mr. Athey said. Markets expected a
coronavirus vaccine to be approved between year-end and the middle
of the first quarter of 2021, and for distribution to certain parts
of the population to start before the middle of next year, he
said.
Shares in Simon Property Group Inc. rose 6.9% in premarket trade
after mall developer Taubman Centers agreed to accept a price cut
in its takeover by the company. That will allow the two firms to
avoid a drawn-out legal battle that was set to start Monday.
The pan-European Stoxx Europe 600 rose 1.4%, led by shares in
banks and other sectors hard hit by the pandemic, such as oil and
travel.
Shares in Spanish lender BBVA rose 15% after PNC Financial
Services Group agreed to buy its U.S. arm for $11.6 billion. Banco
de Sabadell jumped 13% on speculation that the sale could make it a
BBVA takeover target.
Last week, investors shunned tech stocks that have benefited
from consumers spending more time at home, instead favoring
companies that would benefit from the reopening of the economy.
"There is a fundamental reason why equities are rising, which is
a recovery that seems to be pretty solid, the prospect of more
stimulus, and also the vaccine," said Luca Paolini, chief
strategist at Pictet Asset Management.
Though questions remained about the efficacy and distribution of
a vaccine, and investors are perhaps overly exuberant in the short
term, "for next year, everything seems to be actually moving in the
right direction," Mr. Paolini added.
The U.S. reported more than a million coronavirus infections for
the past week, including more than 133,000 Sunday, as the national
total surpassed 11 million. The country also set a record for
hospitalizations, with 69,987 reported Sunday, according to the
Covid Tracking Project.
Commodities rallied after strong economic data out of China and
Japan pointed to healthy demand for industrial metals. Chinese
industrial production rose 6.9% in October from a year earlier.
Gross domestic data showed Japan's economy grew by its fastest pace
in 40 years in the third quarter.
Copper jumped 2% to its highest level since June 2018. Brent
crude, the international benchmark for oil, rose 3.7% to $44.35 a
barrel.
Asian stocks benefited from the signing of a major trade deal
that includes China, Japan, South Korea and 12 other countries. The
regional bloc covers around a third of global economic output.
Japan's Nikkei 225 rose 2.1% to log a fresh 29-year high.
Indexes in Taiwan and South Korea rose by similar amounts to hit
multiyear highs or records. Chip makers Samsung Electronics and
Taiwan Semiconductor Manufacturing Co., both major constituents of
their local indexes, each rose more than 4%. The Shanghai Composite
climbed 1.1%.
Write to Mischa Frankl-Duval at Mischa.Frankl-Duval@wsj.com and
Frances Yoon at frances.yoon@wsj.com
(END) Dow Jones Newswires
November 16, 2020 07:46 ET (12:46 GMT)
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