Global markets roared Monday, with the Dow Jones industrial average soaring to intraday highs not seen since February as investors welcomed promising vaccine news as hopeful signs of an eventual return to normalcy.
The Dow Jones industrial average spiked more than 1,600 points before giving back nearly half those gains. It closed up 834 points, or nearly 3%, at 29,157.97, after drug giant Pfizer and German biotechnology firm BioNTech announced that their vaccine candidate was more than 90% effective, compared with a placebo.
It is the strongest sign yet that the unprecedented effort, breaking scientific speed records, to develop a vaccine was within sight.
“I think the 90% success rate in trials is on the high end of street expectations given the 40-60% success for seasonal flu vaccines,” Wayne Wicker, chief investment officer at Vantagepoint Funds, said in an email to The Washington Post. “This is going to give a real boost to a broader range of stocks beyond technology as shown by the outsized gains in the Dow premarket. With greater clarity on both political and health issues, this should provide additional momentum in the short run.”
Apparent President-elect Joe Biden applauded Pfizer’s breakthrough in a statement Monday, but warned that the end of the battle against COVID-19 is still months away. “Today’s news does not change this urgent reality,” Biden said. “Americans will have to rely on masking, distancing, contact tracing, hand washing and other measures to keep themselves safe well into next year.”
The Standard & Poor’s 500 index advanced 1.2% to 3,550. The tech-heavy Nasdaq 100, which has seen strong growth throughout the pandemic, tumbled more than 1.5% to 11,713.
Companies whose stocks have been pummeled by the pandemic, especially in travel, saw outrageous gains: Carnival cruise stock leapt 38% after opening bell, while Delta, American and United airlines are all up more than 20%. Pandemic winners saw major reversals: Zoom’s stock tumbled 15%, while Wayfair and Overstock slumped more than 18%.
“If the Pfizer covid vaccine turns out to be the real deal, then this is a game-changer,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in comments emailed to The Post. “To the extent that consumer spending and economic activity have been suppressed by concerns of the increasing covid cases, anything that can reverse that trend will be welcomed by the markets.”
The vaccine news comes amid another surge in coronavirus infections, one that has sparked renewed business and travel restrictions in some countries. If the virus cannot be tamed, it could trigger the renewal of widespread shutdowns that caused a massive economic contraction and ushered the United States into recession. On Sunday, global infections topped 50 million, according to data tracked by Johns Hopkins University.
“Today is a great day for science and humanity,” Albert Bourla, Pfizer’s chairman and chief executive, said in a statement. “We are reaching this critical milestone in our vaccine development program at a time when the world needs it most with infection rates setting new records, hospitals nearing over-capacity and economies struggling to reopen.”