Stocks rose Monday on positive coronavirus vaccines news and as investors bought the dip in tech stocks.
The S&P 500 rose 1%, with the tech-heavy Nasdaq up 1.5%. The 10-Year Treasury yield was flat at 0.67%.
The Nasdaq is still down about 9% from Sept. 2, when the tech sell-off began. Last week was another rough one for tech investors, and some tech analysts are advocating for namely cloud and FAANG stocks.
Nvidia (NVDA) - Get NVIDIA Corporation Report will buy the highly-diversified chipmaker Arm for $40 billion from SoftBank. Arm has a focus on smartphone chips. The $300 billion by market Nvidia rose 7%. The iShares PHLX Semiconductor ETF (SOXX) - Get iShares PHLX Semiconductor ETF Report rose 2%.
Cyclical stocks, especially those sensitive to a full reopening, were rising as well. Pfizer (PFE) - Get Pfizer Inc. Report CEO Albert Bourla told a reporter Sunday that the company could very well have its coronavirus vaccine by the end of 2020 if it gets FDA approval around October. The stock, which is indeed materially impacted by the company’s coronavirus vaccine efforts, rose as much as 2% in premarket trading, an indication the market takes this news seriously. The gain leveled to 0.7% after the opening bell. Restaurant and airlines stocks rose around 1%. Banking and oil stocks rose as well.
"There is a fair amount to digest coming off of a weekend of deal machinations and vaccine progress,” wrote Chris Larkin, Managing Director of Trading and Investment Product at E*Trade in emailed remarks to reporters. "As US stocks attempt to rebound from their first two-week losing streak in more than four months, we’re seeing futures point to the positive.”
Many large cap value stocks are now trading at fairly expensive valuations compared to interest rats, which analysts recognize. The election and the future of more fiscal stimulus — key to the economic recovery — are two factors that investors are watching vigilantly.