Monday, May 27, 2024

Wall Street rallies following worst week since Halloween

by Associated Press

NEW YORK (AP) — Stocks are rising on Wall Street Monday, as the country’s first vaccinations against COVID-19 have the end of the pandemic slowly materializing into hazy sight.

Investors are also waiting to see if government officials can deliver any progress on separate negotiations happening in Washington and on the other side of the Atlantic. Both sets of talks have been messy and dispiriting, but they could give markets a further boost if successful.

The S&P 500 was 0.9% higher in morning trading and clawing back much of its 1% slip from last week. That was its worst weekly performance since Halloween. The Dow Jones Industrial Average was up 245 points, or 0.8%, at 30,291, as of 10:28 a.m. Eastern time, and the Nasdaq composite was 1.3% higher.

Hospital workers are unloading the first batches of a coronavirus vaccine developed by Pfizer and its German partner, BioNTech, following its approval for emergency use by U.S. regulators. Health care workers and nursing home residents will be first in line for vaccinations, and the hope in markets is that a wider rollout next year will help pull the economy back toward normal following its devastation this year.

Such optimism has helped Wall Street’s rally broaden out beyond Big Tech stocks, which were pulling the market higher almost singlehandedly earlier in the pandemic. Roughly three out of four stocks in the S&P 500 were climbing Monday, including includes companies that desperately need the economy to get healthier and reopen.

Smaller companies were also rising more than their larger rivals, an indication that investors are feeling more confident about the economy’s prospects. The Russell 2000 index of smaller stocks gained 1.5%.

Alexion Pharmaceuticals soared 30.6% for the biggest gain in the S&P 500. It’s the first trading day for the stock since AstraZeneca said on Saturday that it would buy the company for $39 billion in cash and stock.

Of course, the hopes for the economy in the future are tempered by the worsening pandemic in the present. Surging coronavirus counts have forced a downshift to the economy’s momentum, including last week’s worse-than-expected report on joblessness. The increasing death toll is pushing governments around the world to bring back varying degrees of restrictions on companies, and it’s also scaring potential customers away from businesses on its own.

To help in the interim, economists and investors have been asking Congress to deliver another round of financial support for the economy. Democratic and Republican legislators have been discussing a bipartisan possibility, which has raised hopes on Wall Street recently. But bitter partisanship has prevented a deal for months, and a deep divide still dominates on Capitol Hill.

Across the Atlantic, hope was rising that talks are making progress in what has been just as frustrating as the stalemate in Washington, a potential deal on the terms of the United Kingdom’s exit from the European Union.

The EU’s chief negotiator Michel Barnier said Monday he believes a trade agreement is possible following nine months of negotiations, now that remaining disputes have been whittled down to just two. Both sides are still teetering on the brink of a no-deal departure, though. They have committed to a final push ahead of Jan. 1, when a transitional period following Britain’s Jan. 31 departure from the bloc is to end.

Hope for a deal helped the value of the British pound rise against other currencies. In European stock markets, France’s CAC 40 rose 0.6%, and Germany’s DAX returned 1%. The FTSE 100 in London was virtually unchanged.

Earlier Monday, the quarterly “tankan” survey by the Bank of Japan showed business sentiment has improved sharply with expectations for a recovery from a year-long recession.

Although still in negative territory, the main measure of business conditions of large manufacturers was a marked improvement from the past several quarterly reports as Japan battled the coronavirus pandemic.

Japan’s Nikkei 225 index added 0.3%. Other Asian markets were mixed. Hong Kong’s Hang Seng shed 0.4%, South Korea’s Kospi fell 0.3% and stocks in Shanghai rose 0.7%.

In another sign of improving confidence in the economy, the yield on the 10-year Treasury rose to 0.92% from 0.87% late Friday.

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