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Stocks bolstered by positive vaccine update
18-May-20 16:15 ET
Dow +911.95 at 24597.37, Nasdaq +220.27 at 9234.85, S&P +90.21 at 2953.78

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 rallied 3.2% on Monday, as reopening hopes were fueled by a positive vaccine update from Moderna (MRNA 80.00, +13.31, +20.0%). The small-cap Russell 2000 outperformed with a 6.1% gain, followed by the Dow Jones Industrial Average (+3.9%) and Nasdaq Composite (+2.4%).

Prior to the open, Moderna announced that a Phase 1 study for its COVID-19 vaccine candidate yielded positive interim clinical results. The company was hopeful that a Phase 3 trial could begin earlier than expected in July, and it started scaling up its manufacturing capacity so it can produce as much vaccine as possible if approved.

The news provided an added boost to the market, which was already trading higher following Fed Chair Powell's "60 Minutes" interview with CBS. Mr. Powell assured the market that the Fed is still not out of ammunition and suggested Congress should do more. Mr. Powell also said that a full economic recovery could take more than a year and will likely require a vaccine.

The timely vaccine update, then, coupled with the Fed's support and an increase in nationwide reopening efforts, helped ignite a cyclically-charged rally.

All 11 S&P 500 sectors finished higher, including leadership from the energy (+7.6%), industrials (+6.6%), and financials (+5.3%) sectors. Oil prices climbed 8.3%, or $2.44, to $31.82/bbl. Treasuries sold off, driving yields higher in a curve-steepening trade. The CBOE Volatility Index declined 8.0% to 29.33.

Apple (AAPL 314.96, +7.25, +2.4%), Walt Disney (DIS 116.85, +7.80, +7.2%), and Delta Air Lines (DAL 21.86, +2.67, +13.9%) were among the latest companies announcing plans to ramp up their reopening efforts.

Uber (UBER 33.62, +1.15, +3.5%), on the other hand, said it plans to reduce its workforce by an additional 3,000 employees and scale back its non-core businesses due to economic challenges caused by COVID-19. Shares were up nearly 11% following the news but retraced gains to close higher by 3.5%.

As mentioned, Treasury yields increased as safe-haven demand waned amid today's bullish mindset. The 2-yr yield increased four basis points to 0.19%, and the 10-yr yield increased ten basis points to 0.74%. The U.S. Dollar Index declined 0.8% to 99.60.

Monday's economic data was limited to the NAHB Housing Market Index for May, which increased to 37 (Briefing.com consensus 34) from 30 in April. Looking ahead, investors will receive Housing Starts and Building Permits for April on Tuesday.

Nasdaq Composite +2.9% YTD
S&P 500 -8.6% YTD
Dow Jones Industrial Average -13.8% YTD
Russell 2000 -20.1% YTD

Market Snapshot
Dow 24597.37 +911.95 (3.85%)
Nasdaq 9234.85 +220.27 (2.44%)
SP 500 2953.78 +90.21 (3.15%)
10-yr Note -8/32 0.726
NYSE Adv 2601 Dec 313 Vol 1.2 bln
Nasdaq Adv 2674 Dec 593 Vol 4.3 bln

Industry Watch
Strong: Energy, Industrials, Financials, Real Estate
Weak: Health Care, Consumer Staples

Moving the Market

-- Stocks rallied following positive vaccine update from Moderna (MRNA), fueled reopening enthusiasm

-- Fed Chair Powell said central bank is not out of ammunition, suggests Congress should do more

-- Broad-based equity gains; oil prices climbed 8%, Treasuries decline in curve-steepening trade

WTI crude futures rise 8%
18-May-20 15:25 ET
Dow +922.90 at 24608.32, Nasdaq +221.90 at 9236.48, S&P +95.48 at 2959.05

[BRIEFING.COM] The S&P 500 continues to trade near session highs with a 3.3% gain.

One last look at the S&P 500 sectors shows the energy (+7.7%), industrials (+6.7%), and financials (+5.5%) sectors leading in gains. The health care (+1.3%) and consumer staples (+1.3%) sectors underperform, likely due to their defensive-oriented nature.

WTI crude futures settled today's session higher by $2.44 (+8.3%) to $31.82/bbl.