S&P 500 Jumps 0.5% After Pfizer’s Coronavirus Vaccine News

July 2, 2020

Coronavirus Vaccine

Despite a surge in coronavirus cases across the U.S., the market finished mostly higher on Wednesday, the first day of the third quarter, after stocks were boosted by positive coronavirus vaccine news and strong U.S. economic data.

The S&P 500 was up 0.5% on Wednesday, while the tech-heavy Nasdaq Composite gained 1% and the Dow Jones Industrial Average fell 0.3%.

A new study of a potential coronavirus vaccine developed by Pfizer and BioNTech on Wednesday showed positive results at creating neutralizing antibodies in patients.

While the results were released online, they have not yet been reviewed by a medical journal. Shares of Pfizer jumped more than 5% on the news.

Stocks slashed earlier losses after ADP and Moody’s Analytics said that private payrolls jumped by $2.37 million in June, while payrolls for May were revised to a gain of more than $3 million, from a loss of $2.76 million.

The Institute for Supply Management also released its latest survey of U.S. manufacturing activity, which rebounded from a sharp downturn in May and hit its highest level since April 2019.

Shares of companies that would benefit from reopening of the economy, including airlines, cruise stocks, and some retailers, also moved higher on Wednesday.

The stock market’s recent gains come despite increasing coronavirus cases across the country. Many states continue to report record-high numbers of cases, while more than 12 have now paused or rolled back their reopening plans.

White House health advisor Dr. Anthony Fauci warned on Tuesday that at the current pace of new cases, the United States could soon surpass 100,000 new infections per day.

The market closed out its best quarter in decades after finishing higher on Tuesday. Stocks have bounced sharply from their coronavirus recession lows in late March. The Dow surged 18% in the second quarter, its best quarter since 1987. The S&P 500 index jumped over 20% for its best quarter since 1998. Both are still down for the year, however, with the Dow Jones down by 11% and the S&P 500 down by close to 5%.

On Tuesday, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin both testified in front of the House Financial Services Committee but provided different opinions on the timeline for an economic recovery. Secretary Mnuchin said he expected economic conditions to “improve significantly” in the second half of the year, while Fed Chair Powell took a more measured approach, warning that “the path of the economy is highly uncertain.”

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