Closing Stock Market SummaryThe S&P 500 (+1.2%), Dow Jones Industrial Average (+1.6%), and Russell 2000 (+2.4%) closed at fresh record highs on Monday after Moderna (MRNA 97.95, +8.56, +9.6%) said its COVID-19 vaccine was 94.5% effective. The Nasdaq Composite was the relative underperformer with a 0.8% gain.
Ten of the 11 S&P 500 sectors contributed to the advance, led once again by the cyclical energy (+6.5%), industrials (+2.5%), financials (+2.3%), and materials (+2.0%) sectors. The health care sector (-0.2%) bucked the positive trend amid influential weakness in Pfizer (PFE 37.36, -1.26, -3.3%), which announced comparably effective vaccine data last week.
The prospects of having more than one vaccine in 2021 for mainstream use strengthened the market's view that next year will feature improved economic and earnings growth. That's why the small-caps and economically-sensitive sectors, which had noticeably underperformed prior to November, extended their recent outperformance today.
Many of the growth stocks underperformed but held up relatively well despite the cyclical leadership. The semiconductor stocks, for example, drew support from reports that Taiwan Semi (TSM 99.27, +6.05, +6.5%) is expanding production capacity to meet high demand from chip companies. The Philadelphia Semiconductor Index gained 2.5%.
Today also featured some smaller M&A deals that were conducive for risk sentiment. Home Depot (HD 279.57, +2.40, +0.9%) agreed to acquire HD Supply (HDS 55.77, +10.96, +24.5%) for $56.00 per share, or about $8 billion, in cash. PNC (PNC 126.29, +3.51, +2.9%) agreed to acquire BBVA USA Bancshares for $11.6 billion in cash.
U.S. Treasuries had more reserved reactions to the positive vaccine news from Moderna, with yields closing slightly higher. The 2-yr yield increased one basis point to 0.18%, and the 10-yr yield increased one basis point to 0.90%. The U.S. Dollar Index decreased 0.2% to 92.59. WTI crude futures rose 3.0%, or $1.22, to $41.34/bbl.
Monday's economic data was limited to the Empire State Manufacturing Survey, which decreased to 6.3 in November (consensus 14.0) from 10.5 in October.
Looking ahead to Tuesday, investors will receive Retail Sales for October, Industrial Production and Capacity Utilization for October, the NAHB Housing Market Index for November, Import and Export Prices for October, Import and Export Prices for October, Business Inventories for September, and Net Long-term TIC Flows for September.
- Nasdaq Composite +32.9% YTD
- S&P 500 +12.3% YTD
- Russell 2000 +7.0% YTD
- Dow Jones Industrial Average +5.0% YTD