Wall Street rebounded impressively on Monday after last week's disappointing performance buoyed by an encouraging early-stage clinical trial data for a potential coronavirus vaccine. Moreover, Fed Chairman, Jerome Powell's promise of more stimulus to lift the pandemic-affected economy boosted investors' sentiments. All three major stock indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) jumped 3.9% to close at 24,597.37. Notably, 29 components of the 30-stock blue-chip index ended in green while one finished in the red. Meanwhile, the S&P 500 climbed 3.2% to close at 2,953.91. The Energy Select Sector SPDR (XLE), the Industrials Select Sector SPDR (XLI) and the Financials Select Sector SPDR (XLF) rallied 8.6%, 6.6 and 5.1%, respectively. Notably, all eleven sectors of the benchmark index closed in the green. Meanwhile, the tech-heavy Nasdaq Composite closed at 9,234.83, soaring 2.4% due to the strong performance of large-cap tech stocks
The fear-gauge CBOE Volatility Index (VIX) decreased 8.1% to close at 29.30. A total of 12.63 billion shares were traded on Monday, higher than the last 20-session average of 11.4 billion. Advancers outnumbered decliners on the NYSE by a 7.12-to-1 ratio. On Nasdaq, a 4.43-to-1 ratio favored advancing issues.
Fed Chairman Talks Recovery
On May 17, Fed Chair Jerome Powell said that the path to economic recovery post the pandemic maybe slow but one shouldn’t doubt the economy’s capabilities. Per Powell, the central bank has enough ammunition to help the economy sail through these trying times. He has categorically mentioned that there is “no limit” to what the Fed can do to inject money into financial markets.
Fed Chairman expressed optimism and believes that the economy will start recovering in the second half of this year, provided there isn’t a second wave of coronavirus. He thinks that economic growth will improve in the July-September quarter, and “it will take some time to peak.” However, he admitted that a full recovery is possible only after the arrival of a vaccine.
Development on COVID-19 Treatment
On May 18, Moderna Inc. (MRNA - Free Report) announced that all 45 patients that received its coronavirus vaccine candidate in a Phase 1 clinical trial developed neutralizing antibodies. The company has received the FDA's permission to conduct more in-depth phase 2 clinical trial. The company plans to begin a phase 3 clinical trial in July.
Consequently, the stock price of Moderna jumped 20% on Monday. Moderna has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
According to the World Health Organization (WHO), there are currently 1,114 ongoing clinical studies for the treatments COVID-19. So far, 21 of the trials have reported interim results with 16 showed positive early results.
Stocks That Made Headline
Uber Stock Up on Further Layoffs & Non-Core Business Closure
With Uber Technologies’ (UBER - Free Report) ride-hailing business taking a severe hit from the coronavirus pandemic, the company announced a second round of layoffs. (Read More)
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