5 Biggest Dow Jones Gainers on Big Vaccine Day

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The biggest Dow Jones Industrial Average gainers Wednesday were concentrated in companies that can grow through the COVID environment, an ironic dynamic On a day which it became clear Moderna  (MRNA) - Get Report will have a coronavirus vaccine ready soon. 

Stocks moved higher Wednesday after news broke that Moderna has a $1.5 billion deal with the U.S. government to produce 100 million doses of a coronavirus vaccine. Moderna shares rose more than 1%, while the stock is reflecting some probability of a big earnings stream from its COVID vaccines. 

But the strong performers in the equity market, which was somewhat risk-on, were largely stocks that investors favor when they harbor uncertainty over the current economic and earnings rebound, which are currently before forecast to be quite speedy. Large cap tech, which largely have strong balance sheets and promising growth opportunities that can cut through health-related and economic headwinds, powered the S&P 500 of a more than 1% by midday. Cyclical stocks were mixed, with not many of them rising to the magnitude of the border indices. 

The NYSE FANG Index rose as much as 4% Wednesday. 

“The move {in FAANGS] today seems to be driven by mean reversion,” David Miller, chief Investment officer at Catalyst Capital Advisors told TheStreet. “The sell-off in tech over the pas week has been quite sharp and overdone.” The Nasdaq 100 fell 3.4% between August 6 and August Tuesday August 11 before Wednesday's rebound. Some are concerned tech stocks are in a bubble, although many of the large cap ones trade at earnings multiples fairly tightly correlated to their earnings streams by several key metrics. 

The Dow Jones Industrial Average heavily composed of value stocks, bot cyclical and defensive, rose about 1% for most of the day. 

Here were the five biggest gainers on the index as of 2:30 EDT:

Home Depot is deemed by many states as an essential business during COVID, as people focus on their homes. Stores are open and the company is executing on a strong digital strategy. The stock has had a strong year. 

Investors are also growing comfortable with the apparent fact that vaccines will indeed soon hit the market, with many players getting shots on goal. Companies producing a vaccine are seeing their stocks perform well in recent days. 

Reopening and cyclical stocks were performing poorly Wednesday partly because Congress has been slow on another round of fiscal stimulus. The road back to full employment will slow down if small businesses don’t get a hold of fresh and cheap liquidity now. 

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