After a challenging week last week, the Dow Jones Industrial Average and S&P 500 are attempting to climb higher on Monday after positive vaccine news from AstraZeneca and the University of Oxford.
The biotech giant said their coronavirus vaccine was as much as 90% effective, although data varied, making it the latest vaccine this month to report promising trial data.
Benchmark stock indexes were mixed earlier despite the news, with the tech stocks falling even as the Dow advanced. The S&P 500 gained 0.1%. But in early afternoon trade, the Nasdaq is treading slightly above water, putting all three indices in the green for the time being.
Meanwhile, key stock index ETFs, the SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 ETF Trust (SPY), and Invesco QQQ Trust (QQQ) are still mixed Monday, with the first two climbing and the latter declining.
Vaccine and Coronavirus Latest
AstraZeneca reported that its vaccine has an average effectiveness of 70% with one dosing regimen revealing an effectiveness of 90%, while the other had a lower 62% efficacy. The data was promising, but still lower than the vaccine data from Pfizer-BioNTech and Moderna, which reported near 95% efficacy in late-stage trial data.
The positive vaccine data in November has balanced a lack of stimulus and fueled a move higher in stocks, even as worries about spiking coronavirus cases continue. Even with the concerns, the Dow has gained 10% in November, while the S&P 500 advanced 8%.
“With three vaccines now showing efficacy at 90%+ and health officials in the U.S. and EU rushing to approve them, the vaccination process is set to commence before the end of the year,” wrote Adam Crisafulli of Vital Knowledge. “This vaccine optimism is more than offsetting the very grim near-term transmission/mitigation landscape as cases spike and governments take further action to curb the virus spread.”
Sanguine economic news helped elevate the benchmark averages to session highs as well after IHS Markit said their U.S. manufacturing and services purchasing managers’ indexes notched multiyear highs. The flash U.S. services index pegged 57.7, its loftiest level in more than five years, while the manufacturing PMI jumped to 56.7, its highest level in over six years.
Stocks are climbing after a challenging week last week, where Friday’s spike in Covid-19 infections elevated the seven-day average of new cases to over 167,600, an week-over-week increase of nearly 20%, according to data from Johns Hopkins University. The surge has led to renewed restrictions and pending lockdowns in certain areas like California, where Gov. Gavin Newsom instituted a “limited Stay at Home Order” on a majority of the state’s residents.
Analysts are concerned about the spike in cases but still optimistic about stock prospects for the remainder of the year.
“Stocks this week will trade on lockdown concerns and rising cases, but could see a boost into early December as the optimism around a near term, stopgap stimulus package grows,” said Shannon Saccocia, chief investment officer at Boston Private.
“Overall, the push and pull between tech stocks and cyclicals will likely continue through the next couple of weeks, and we could see some tough days as economic data is released that reflects the deterioration in consumer spending we are currently experiencing,” Saccocia added.
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