Global stocks return to record high as vaccine news adds to election rally

Crude oil prices leapt about 9% to more than $40 a barrel. Prices for government bonds—where investors traditionally park funds during times of uncertainty—tumbled sharply

By Eshe Nelson and Matt Phillips

Published: Nov 10, 2020

Traders working at the New York Stock Exchange in New York on Monday, Nov. 9, 2020. Stocks rocketed higher on Monday after the pharmaceutical giant Pfizer said early data showed that its coronavirus vaccine appeared 90 percent effective. (NYSE via The New York Times)

Global markets soared Monday, in a relief-fueled rally as clarity emerged on the two concerns that have gnawed on investors for months: the presidential election and rampaging coronavirus.

Stocks rocketed higher after the pharmaceutical giant Pfizer said early data showed its coronavirus vaccine appeared 90% effective. The news followed Joe Biden’s election as the 46th president of the United States on Saturday, a sign that the American vote — which some investors worried could spiral into a chaotic period if President Donald Trump lost — appeared to proceed more or less normally.

On Wall Street, the S&P 500 rose more than 3% in early trading before falling back as the day went on. A gain of more than 2% for the day would leave it above its Sept. 2 closing record of 3,580.84.

The benchmark Stoxx Europe 600 index surged 4%, its biggest one-day gain since March, while the FTSE 100 in Britain rose 4.7%. In Asian markets, which closed before Pfizer announced its news, the Nikkei 225 in Japan ended the day 2.1% stronger, and the Hang Seng index in Hong Kong finished up 1.2%.

Markets were already higher before Pfizer said a vaccine it was developing with BioNTech was found to have been more than 90% effective in preventing COVID-19 infections, based on a large study. Pfizer said by the end of the year, it will have manufactured enough doses of the vaccine to immunize 15 million to 20 million people.

Scientists have cautioned against hyping early results before long-term safety and efficacy data has been collected, and no one knows how long the vaccine’s protection might last. It is likely to be months before Pfizer’s vaccine or any other is able to substantially curb the coronavirus outbreak.

"Hurdles still remain," said Karen Ward, a strategist at JPMorgan Asset Management. “We need to find out more about production capabilities, rollout and takeup. But for now, this is shifting the winners and losers.”

Shares of companies that would benefit from a return to economic normalcy surged. American Airlines and United Airlines rose about 17%. Carnival, the cruise ship operator, rose nearly 36%. Also sharply higher were the shopping center owners Simon Property Group and Kimco Realty, the concert promoter Live Nation, and the office-building owner Vornado Realty Trust.

Crude oil prices also leapt about 9% to more than $40 a barrel. Prices for government bonds — where investors traditionally park funds during times of uncertainty — tumbled sharply.

Trading on Monday followed the best week for the S&P 500 since April, as investors became more convinced that President-elect Biden would govern alongside a Republican-held Senate. However, two runoff elections in Georgia mean the control of the Senate will not be known until January.

“With more certainty around the election, a strong quarter of earnings across many sectors, and extremely positive news on the vaccine front, there is little to hold us back,” said Chris Larkin, managing director of trading and investment products at E-Trade Financial.

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