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Deal
Shares of stocks that have been demolished as the coronavirus and related lockdowns have crippled the global economy rose on Monday following positive news from Pfizer and its German partner BioNTech about their experimental COVID-19 vaccine.
FILE PHOTO: A Pfizer logo is displayed on a monitor on the floor of the New York Stock Exchange (NYSE) in New York, USA, July 29, 2019. REUTERS / Brendan McDermid
NEW YORK: Shares of stocks that have been demolished as the coronavirus and related lockdowns have paralyzed the rising global economy on Monday following positive news from Pfizer and its German partner BioNTech about the COVID-19 experimental vaccine.
Pfizer shares were up 10.16 percent, though they were off previous highs, after the company said the vaccine was more than 90 percent effective in a large-scale clinical trial that it will now look for. an emergency use authorization in the United States. BioNTech’s US shares were up 9.89%.
While Pfizer shares were higher on the news, the health sector overall underperformed the S&P 500 overall, largely due to a sharp drop in Biogen after a Food Administration panel and US Drugs voted against his Alzheimer’s treatment.
The energy sector, with a drop of more than 50% until the end of Friday as the reduction of trips depleted the demand for oil and gas, soared 14.82% and was on track for its largest daily percentage increase since on March 24. Exxon Mobil gained 13.39% and Valero Energy soared 29.81%.
Banks, down more than 34% through Friday, were up 12.66% and were also on track for their biggest one-day percentage gain since March 24 as bond yields soared and America’s yield curve steepened. A similar reaction was seen in Europe, with French banks Societe Generale and BNP Paribas closing at 18 percent.
“It’s about the vaccine. If Pfizer’s vaccine is as good as people say, it will change the rules of the game for consumer behavior and many of the trends we’ve seen from depressed cyclical industries are going to reverse that hope of that this is the beginning of the end for our deal with COVID-19, “said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, North Carolina.
(GRAPH: S&P 500 Sectors Win Amid Vaccine Hopes: https://graphics.reuters.com/HEALTH-CORONAVIRUS/ygdpzbrmxpw/chart.png)
Airlines, which were down more than 45 percent through Friday, were up 15.22 percent, led by gains at Delta Air Lines, up 15.07 percent, and Southwest Airlines, as a vaccine would reduce fear of traveling in a closed space.
Other travel-related stocks also increased. Disney was up 11.29 percent, while theme park operator Six Flags advanced 17.07 percent.
S & P’s hotel, restaurant and leisure index soared 5.43% and cruise lines Carnival Corp and Royal Caribbean rose more than 30% each. Casino operator Wynn Resorts was up 26.26%, while hotel operators Marriott International and Hilton Worldwide each gained more than 10%.
Paul Nolte, a portfolio manager at Kingsview Investment Management in Chicago, said the news was particularly good for companies in the service industries. “The services part of the economy can recover strongly,” he said.
“It’s affecting services across the board,” he said, noting strong gains at Disney, Expedia and other travel-related stocks.
On the other hand, names that have benefited from work-from-home policies and travel restrictions, such as Peloton Interactive and Zoom Video, fell 15.55% and 13.48%, respectively.
(Report by Julien Ponthus, additional report by Thyagaraju Adinarayan, Caroline Valetkevitch and Sinéad Carew; edited by Toby Chopra and Nick Zieminski)
