Stocks Sprint on Vaccine News, Yellen Pick for Treasury

Stocks rose on Monday after AstraZeneca and the University of Oxford said their coronavirus vaccine was up to 90% effective, becoming the third inoculation this month that was revealed to be effective in trial data.

The Dow Jones Industrials rocketed 327.79 points, or 1.1%, to finish Monday at 29,591.27.

The S&P 500 triumphed 20.05 points, or 0.6%, to 3,577.59.

The NASDAQ picked up 25.86 points to 11,880.63.

The Dow hit its session high amid news that President-elect Joe Biden plans to nominate former Federal Reserve Chair Janet Yellen for Treasury secretary. The Wall Street Journal first reported the pick.

Yellen oversaw a solid economic expansion during her term as Fed chair from 2014 to 2018. During that time, rates remained low, and the S&P 500 rose nearly 60%.

AstraZeneca said interim analysis showed its vaccine has an average efficacy of 70% with one dosing regimen showing effectiveness of 90%, while the other demonstrating 62% efficacy. This follows late-stage trial data from Pfizer-BioNTech and Moderna showing that their respective Covid-19 vaccines were around 95% effective.

Shares of cruise lines and airlines jumped on hope distributing these vaccines would reopen the economy and boost travel early next year.

Shares of Carnival Corp. added 4.8%, while United Airlines rose 2.6%. Shares of major tech companies struggled, however. Apple dropped nearly 3%, and Netflix slid 2.4%. Facebook, Amazon, Alphabet and Microsoft all posted slight losses.

On Monday, Goldman Sachs cut its fourth-quarter Gross Domestic Product forecast along with its economic growth estimate for the first quarter of 2021.

The bank now expects the U.S. economy to grow by 3.5% in the fourth quarter. That’s down from a previous forecast of 4.5% annualized growth. In the first quarter of next year, Goldman now sees economic growth of just 1%, down from a previous estimate of 3.5%.

The positive vaccine data this month has jolted stocks higher to record highs, despite concern about rising cases. Despite stalling out a bit last week, the Dow is up 10% in November. The S&P 500 is up 8%.

The major averages hit their session highs after IHS Markit said its U.S. manufacturing and services purchasing managers’ indexes hit multiyear highs. The flash U.S. services index rose to 57.7, its highest level in more than five years. The manufacturing PMI popped to 56.7, its highest level in over six years.

Prices for the 10-Year Treasury were lower, boosting yields to 0.86% from at Friday’s 0.83%. Treasury prices and yields move in opposite directions.

Oil prices moved up 46 cents to $42.88 U.S. a barrel.

Gold prices dropped $38.30 to $1,834.10 U.S.