Wall Street jumps on positive start to earnings, vaccine hopes
By Medha Singh and Devik Jain (Reuters) - Wall Street's main indexes rose sharply on Monday, with the Nasdaq at a fresh intraday record high, as investors cheered signs of progress in COVID-19 vaccine development and an upbeat start to the second-quarter earnings season by PepsiCo. Shares of German biotech firm BioNTech jumped 13.9% and Pfizer Inc climbed 5.4% as two of their experimental coronavirus vaccines received the U.S. FDA's 'fast track' designation
By Medha Singh and Devik Jain
(Reuters) - Wall Street's main indexes rose sharply on Monday, with the Nasdaq at a fresh intraday record high, as investors cheered signs of progress in COVID-19 vaccine development and an upbeat start to the second-quarter earnings season by PepsiCo.
Shares of German biotech firm BioNTech
"It's selective optimism as we enter earnings season, chasing the same stocks that have been strong and looking forward to earnings as market continues to have a narrow focus," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
Merger news also perked up investors as chipmaker Analog Devices Inc
Investors are bracing for what could be the sharpest drop in quarterly earnings for S&P 500 firms since the financial crisis, according to IBES Refinitiv data. Results from big banks will be in focus this week.
The April-June reports will reveal the extent of the damage wreaked by coronavirus -induced lockdowns on corporate profits. With a recent jump in cases in the United States that has made Florida, Arizona, Texas and California the new epicenters, analysts are predicting that S&P 500 earnings will return to growth only by 2021.
S&P 500 versus financials: widest gap since GFC https://fingfx.thomsonreuters.com/gfx/mkt/jbyvrrwjave/SPX%20versus%20financials.png
The S&P 500, which is about 5% below its record high hit in February, briefly turned positive for the year on an intraday basis for the second time since the coronavirus -induced crash.
At 12:58 p.m. ET, the Dow Jones Industrial Average <.DJI> rose 468.05 points, or 1.79%, to hit its highest level in nearly four weeks at 26,543.35.
The S&P 500 <.SPX> was up 40.05 points, or 1.26%, at 3,225.09 and the Nasdaq Composite <.IXIC> gained 142.61 points, or 1.34%, at 10,760.06.
Healthcare stocks <.SPXHC> rose 2.3%, the most among all major S&P sectors trading higher.
A recent slew of encouraging economic data has strengthened belief that the stimulus-pumped U.S. economy is on the road to recovery, helping investors look past a recent spike in U.S. infections.
"The market is treating these new cases like localized flare ups, as opposed to a second wave," said Tim Chubb, chief investment officer at Girard in West Chester, Pennsylvania.
Advancing issues outnumbered decliners by a 2.16-to-1 ratio on the NYSE and by a 1.66-to-1 ratio on the Nasdaq.
The S&P index recorded 38 new 52-week highs and no new lows, while the Nasdaq recorded 121 new highs and 15 new lows.
(Reporting by Medha Singh in Bengaluru, additional reporting by Herbert Lash in New York; Editing by Saumyadeb Chakrabarty and Anil D'Silva)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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