The Dow Jones Industrial Average and S&P 500 surged to record closing highs Monday after Moderna (MRNA) - Get Report said its coronavirus vaccine candidate was 94.5% effective in a late-stage clinical trial.
The Dow rose by 470.63 points, or 1.6%, to 29,950.44. The S&P 500 rose 41.76, or 1.16%, to 3,626.91. The Nasdaq ended up 0.8%.
The Dow's previous all-time closing high of 29,551 was set on Feb. 12. The S&P 500's previous closing record of 3,585 was set on Friday.
Moderna's efficacy rate topped the 90% efficacy rate reported by Pfizer (PFE) - Get Report last week. The company noted the vaccine can be stored for up to six months at standard freezer temperatures.
Drugmaker Moderna said it expects to apply for emergency use authorization with the U.S. Food and Drug Administration within the coming weeks. Moderna shares rose 9.6%.
"Additional positive news on the Covid-19 vaccine front is more evidence that an end to the pandemic is on the horizon and that the economy can eventually reopen without fears of further lockdowns," said David Trainer, CEO of Nashville-based investment research firm New Constructs.
Stocks had been higher during the premarket session after advisers to President-elect Joe Biden said they opposed a nationwide lockdown but preferred targeted measures to control the surge in U.S. coronavirus cases.
Vivek Murthy, who serves as co-chair of Biden's coronavirus advisory board, said strict lockdowns aren't always necessary if people comply with less restrictive measures such as wearing masks and social distancing. The U.S. over the weekend topped 11 million known cases of Covid-19, the disease caused by the coronavirus.
“If we just lock down the entire country without targeting our efforts, then we are going to exacerbate the ‘pandemic fatigue’ people are feeling, you’re going to hurt jobs and the economy, you’re going to shut down schools and hurt the education of our children,” Murthy, a former U.S. surgeon general, told “Fox News Sunday.”
Stocks also received a boost from better-than-expected economic data from both Japan and China.
Home Depot, the world's biggest home-improvement retailer, said it would pay $56 a share for HD Supply, which distributes tools and products to the maintenance and construction sector. That's a 25% premium to HD's closing price on Friday and values the Atlanta-based HDS at around $8 billion including debt.
With just over 92% of the S&P 500 reporting so far, third-quarter earnings are set to decline around 7.4% from last year, a much better result than the 21.4% forecast prior to the start of the reporting in early October. The early estimate for fourth-quarter earnings, meanwhile, suggests an 11% decline from a year earlier.