U.S. stocks rose Monday on optimism that talks for additional fiscal stimulus are progressing and that the rollout of Covid-19 vaccines could help stem the pandemic.
The Dow Jones Industrial Average rose 47 points, or 0.2%, to 30092. The S&P 500 ticked up 0.3%, while the Nasdaq Composite gained 1.1%.
U.S. lawmakers on Sunday signaled a growing willingness to compromise on the most contentious issues that have held up the passage of a fresh coronavirus-relief package in recent months. Leadership from both parties indicated they might look to passing a narrower spending bill. Investors are betting that a deal will be struck, and the additional spending will help bolster the economic rebound.
“In the U.S., it is all about fiscal policy,” said Justin Onuekwusi, head of retail multiasset funds at Legal & General Investment Management. “The markets have priced some of this in and believe it is going to happen.”
Pfizer started shipping its Covid-19 vaccine in the U.S., dispatching trucks from a Michigan plant. That is bolstering optimism that rising infection levels may be checked in coming months, prompting an end to restrictions on social and business activity. An end to lockdowns would improve the outlook for companies whose operations have been disrupted this year by the pandemic.
The vaccine “gives you greater certainty around the earnings numbers for 2021 and 2022 because there is a lesser probability of lockdowns,” Mr. Onuekwusi said. “The longer you spend at lower earnings levels, the more companies start to get into trouble because demand isn’t there, and then you get this permanent economic scaring.”
In corporate news,
rose 31% after
agreed to buy the Boston-based company for $39 billion in cash and stock. Shares of AstraZeneca fell about 6%.
Inoculations with a Covid-19 vaccine from Pfizer and partner BioNTech could begin around the U.S. as early as Monday.
Photo:
Pascal Bonniere/Zuma Press
Shares of vaccine makers wavered after the U.S. Food and Drug Administration authorized Pfizer and partner
shot on Friday. Pfizer edged down about 3%, while Moderna gained about 0.1% and
climbed 3%.
“The other thing that we’re watching closely is the sentiment from Americans on who will get vaccinated,” said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors. “We’ve seen that improve over the past couple months where more Americans say that they will take the vaccine. The full distribution of this vaccine is very important for it to work for the long term.”
Ms, Horneman said she is also monitoring the pandemic-related business closures in the short-term as some states call for restaurants to temporarily halt indoor dining. “That’s going to have an impact on some of the economic data we’ll see in January and February,” she said.
rose 6% after private-equity firm Vista Equity Partners agreed to buy the educational-software maker.
In bond markets, the yield on the 10-year U.S. Treasury note ticked up to 0.908%, from 0.892% on Friday. Yields rise when bond prices fall.
Overseas, the pan-continental Stoxx Europe 600 rose 0.4%.
Investors are hopeful that the U.K. and the European Union will strike a trade deal after both sides agreed to continue negotiations past a Sunday deadline. Officials said they were narrowing differences over some of the issues that have bedeviled the talks.
“The fact that the talks are continuing has left a spark of hope that both sides do want to find compromise,” said Jane Foley, head of foreign-exchange strategy at Rabobank.
Trading in Asia ended on a mixed note. China’s Shanghai Composite Index advanced 0.7%, and Japan’s Nikkei 225 edged 0.3% higher. South Korea’s Kospi declined 0.3%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Amber Burton at Amber.Burton@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
