Wall Street soared on Monday, with optimism about the reopening of the economy and news that another vaccine has been authorized for emergency use.
The Dow Jones Industrial Average jumped 2.2%, the S&P 500 gained just under 2% and the Nasdaq rose 1.9%.
Positive news for Boeing, one of Dow’s heavyweights, helped pull the blue-chip index up about 660 points early in the morning trading session. United Airlines announced on Monday that it would buy 25 Boeing 737 Max jets, a vote of confidence in the aerospace giant’s battle, raising shares by almost 7%.
The market recovery follows a week low for Wall Street, with inflationary fears raising 10-year Treasury bill yields to the highest levels in a year and the Nasdaq, which has a heavy weight in technology, had its worst liquidation in four months.
Monday’s investor confidence focused on positive vaccine news after the Food and Drug Administration granted emergency use authorization on Saturday for Johnson & Johnson’s Covid-19 vaccine, which began shipping Monday morning -market.
The vaccine is “in the trucks while we talk,” Johnson & Johnson CEO Alex Gorsky said on Monday on NBC’s “TODAY” program. “We are dispatching 4 million, literally, as we speak. Within the next 24 to 48 hours, Americans should start receiving gunshots.”
Behind general economic optimism is “the expectation that the United States will achieve collective immunity sometime between Memorial Day and July 4th,” said Mark Zandi, chief economist at Moody’s Analytics. “In the summer, we expect the pandemic’s setback to trigger a considerable amount of demand that has accumulated in families trapped at home.”
The economy will also be “overfed” as soon as President Joe Biden’s stimulus package is approved, Zandi added.
On Saturday, the House voted to approve Biden’s $ 1.9 trillion Covid-19 aid package, which includes $ 1,400 direct payments, a $ 400 federal unemployment bonus per week, a child allowance of up to $ 3,600 for a year and billions of dollars to distribute coronavirus vaccines and assist schools and local governments.
The bill now goes to the Senate, where a provision to raise the minimum wage is likely to be removed.