By Chuck Mikolajczak
NEW YORK (Reuters) – A gauge of global stocks climbed to a record and oil prices jumped on Monday as the latest positive data for a possible COVID-19 vaccine and signs of economic recovery in Asia boosted sentiment.
U.S. stocks advanced, with the Dow Industrials setting a record as it neared the 30,000 mark for the first time, thanks to news from pharma company Moderna <MRNA.O> saying its prospective vaccine was 94.5% effective in preventing the illness which has crushed economies across the globe.
Cyclical names, which generally benefit the soonest as an economy recovers from a recession, led the way higher, with energy <.SPNY>, industrial <.SPLRCI> and financial <.SPSY> sectors the top performing.
The announcement by Moderna followed similarly upbeat news a week ago from rival Pfizer <PFE.N>.
“The endgame is as clear as it has been while the path to get there may be murkier than we expected,” said Ross Mayfield, investment strategy analyst at Baird.
“You can see the continued broadening out of the rally and in the rotation into some of the more cyclical and value-oriented parts of the market.”
Mayfield cautioned that there were still some near-term headwinds facing the market, including uncertainty over a possible fiscal stimulus package to buttress the economy before any vaccine could begin to be distributed.
The MSCI World Index of global shares, building on strong overnight gains in Asia’s leading markets managed to extend gains after the Moderna announcement to hit a record.
The Dow Jones Industrial Average <.DJI> rose 296.07 points, or 1%, to 29,775.88, the S&P 500 <.SPX> gained 19.6 points, or 0.55%, to 3,604.75 and the Nasdaq Composite <.IXIC> added 23.46 points, or 0.2%, to 11,852.75.
Shares in Europe also gained on the Moderna news, with the STOXX 600 closing at its highest level in over 8 months.
The pan-European STOXX 600 index <.STOXX> rose 1.18% and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> gained 0.91%.
MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> had hit its highest level since launching in 1987 as Japan pulled out of recession, China posted better-than-expected industrial output data and the region signed the largest ever trade deal.
The prospect of an end to demand-demolishing coronavirus-driven lockdowns also helped oil prices jump.
U.S. crude <CLc1> rose 2.72% to $41.22 per barrel and Brent <LCOc1> was at $43.82, up 2.43% on the day.
U.S. Treasury yields rose on Monday and the yield curve steepened in the wake of the vaccine data. Benchmark 10-year notes <US10YT=RR> last fell 2/32 in price to yield 0.8979%, from 0.893% late on Friday.
Graphic: Coronavirus cases Nov. 16 – https://fingfx.thomsonreuters.com/gfx/mkt/oakvexomnpr/Pasted%20image%201605511307200.png
After initially showing slight gains, the dollar edged lower against a basket of major currencies. Citibank said it expects the greenback to weaken as much as 20% next year due to the widespread distribution of COVID-19 vaccines and ongoing monetary easing.
Sterling was little changed versus the greenback as the clock was running down on Brexit trade talks, European Union diplomats warned Britain.
The dollar index <=USD> fell 0.013%, with the euro <EUR=> up 0.07% to $1.184.
Sterling <GBP=> was last trading at $1.3187, up 0.01% on the day.
(Reporting by Chuck Mikolajczak; Editing by Bernadette Baum and Nick Zieminski)
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