U.S. Stocks Rally On Coronavirus Treatment, Vaccine News

(RTTNews) - Stocks moved significantly higher over the course of the trading session on Monday, adding to the gains posted last week. With the upward move, the Nasdaq and the S&P 500 reached new record closing highs, while the Dow ended the session at its best closing level in six months.

Going into the close of trading, the Dow and the S&P 500 reached new highs for the session. The Dow surged up 378.13 points or 1.4 percent to 28,308.46, the Nasdaq advanced 67.92 points or 0.6 percent to 11,379.72 and the S&P 500 jumped 34.12 points or 1 percent to 3,431.28.

The strength on Wall Street came following upbeat news on the coronavirus front, with companies that have been hit hardest by the pandemic, like cruise operators and airlines, helping lead the markets higher.

The Food and Drug Administration announced Sunday that it has issued an emergency use authorization for investigational convalescent plasma for the treatment of COVID-19 in hospitalized patients.

The FDA concluded convalescent plasma may be effective in treating COVID-19 and that the known and potential benefits of the product outweigh the known and potential risks.

"I am committed to releasing safe and potentially helpful treatments for COVID-19 as quickly as possible in order to save lives, said FDA Commissioner Dr. Stephen Hahn.

He added, "The data from studies conducted this year shows that plasma from patients who've recovered from COVID-19 has the potential to help treat those who are suffering from the effects of getting this terrible virus."

Adding to the positive sentiment, a report from the Financial Times said the Trump administration is considering fast-tracking an experimental coronavirus vaccine from the U.K. for use in America ahead of the presidential election.

Citing three people briefed on the plan, the FT said one option being explored to speed up the availability of a vaccine would involve the FDA awarding emergency use authorization in October to a vaccine being developed in a partnership between AstraZeneca (AZN) and Oxford University.

An advance by shares of Apple (AAPL) also contributed to continued strength among tech stocks, as today marks the record date for the tech giant's recently announced 4-for-1 stock split.

Sector News

Airline stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Airline Index up by 7.3 percent. With the jump, the index ended the session at its best closing level in two months.

Substantial strength was also visible among energy stocks, which benefited from optimism about the outlook for demand and two tropical storms headed toward the Gulf Coast forcing a shutdown in oil production.

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index soared by 4.8 percent, the NYSE Arca Oil Index jumped by 2.8 percent and the NYSE Arca Natural Gas Index surged up by 2.1 percent.

Banking stocks also showed a significant move to the upside on the day, resulting in a 3.6 percent spike by the KBW Bank Index.

Computer hardware, chemical, and steel stocks also saw considerable strength, while biotechnology stocks were among the few groups to buck the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index rose by 0.3 percent, while Hong Kong's Hang Seng Index surged up by 1.7 percent.

The major European markets also showed strong moves to the upside on the day. While the U.K.'s FTSE 100 Index jumped by 1.7 percent, the French CAC 40 Index and the German DAX Index spiked by 2.3 percent and 2.4 percent, respectively.

In the bond market, treasuries ended the session little changed after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by less than a basis point to 0.646 percent after hitting a low of 0.622 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on home prices, consumer confidence and new home sales.

On the earnings front, Best Buy (BBY), Hormel Foods (HRL), J.M. Smucker (SJM) and Medtronic (MDT) are among the companies due to report their quarterly results before the start of trading on Tuesday.