S&P and Dow advance, Treasury yields soar on potential vaccine
By Stephen Culp NEW YORK (Reuters) - The S&P 500 and the blue-chip Dow indices followed world equity indexes higher and U.S. Treasury yields surged on Monday, as progress in the development of a coronavirus vaccine sparked a surge of optimism that the global economy will stage a solid recovery as life returns to normal, A pivot away from tech and into value stocks pushed the bellwether S&P and Dow sharply higher, but they ended the session shy of record highs.
By Stephen Culp
NEW YORK (Reuters) - The S&P 500 and the blue-chip Dow indices followed world equity indexes higher and U.S. Treasury yields surged on Monday, as progress in the development of a coronavirus vaccine sparked a surge of optimism that the global economy will stage a solid recovery as life returns to normal,
A pivot away from tech and into value stocks pushed the bellwether S&P and Dow sharply higher, but they ended the session shy of record highs. Crude oil prices, meanwhile, had their best day in more than five months, jumping more than 8%.
Weakness in shares that benefited from pandemic-related restrictions, the so-called "stay-at-home" stocks, pulled the tech-heavy Nasdaq into the red.
"This is the closest we've been to the hopes that people have had since March that things will get back to the way they were," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "You can throw all the stimulus at it you want but if people are afraid to go out to a movie theater or get on a plane it might not go anyway."
World stock markets got an early boost as global leaders welcomed the U.S. election results, congratulating President-elect Joe Biden even as incumbent Donald Trump refused to concede, vowing to challenge the result.
"You could call it an election relief rally," Nolte added. "Now we can move on to something else."
The CBOE Market Volatility index <.VIX>, a barometer of investor anxiety, hit its lowest closing level since late August.
The Dow Jones Industrial Average <.DJI> rose 834.57 points, or 2.95%, to 29,157.97, the S&P 500 <.SPX> gained 41.06 points, or 1.17%, to 3,550.5 and the Nasdaq Composite <.IXIC> dropped 181.45 points, or 1.53%, to 11,713.78.
Pfizer's announcement gave a jolt to European shares, sending them to an eight-month high, building on expectations of more stable trade policies in the wake of Biden's victory.
The pan-European STOXX 600 index <.STOXX> rose 3.98% and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 1.30%.
Emerging market stocks rose 1.36%. MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 0.92% higher, while Japan's Nikkei <.N225> %.
The vaccine news sent long-dated U.S. Treasury yields sky-rocketing in their biggest one-day jump since March. The yield curve, an indication of risk appetite, hit its steepest level since March.
Benchmark 10-year notes
The 30-year bond
Oil prices surged, posting their biggest daily percentage gain in more than five months as the vaccine news and an OPEC output deal fueled optimism over rebounding demand.
The prospect of a Biden presidency buoyed trade-related currencies on expectations of a thawing of the tariff war as the dollar index rose from a 10-week low.
The dollar index <.DXY> rose 0.68%, with the euro
The Japanese yen weakened 1.93% versus the greenback to 105.39 per dollar, while Sterling
Gold prices slumped as investors pivoted away from the safe-haven metal in favor of riskier assets.
(Reporting by Stephen Culp; additional reporting by Danilo Masoni; Editing by Dan Grebler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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