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May 26, 2020, 4:43 p.m. EDT

Dow closes up 500 points, tests 25,000 level, on recovery hopes and vaccine news

Novavax says it has started human trials of its Covid-19 candidate

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By Chris Matthews, MarketWatch , Joy Wiltermuth


Getty Images
People sit on The Great Lawn in Central Park on Memorial Day during the coronavirus pandemic on May 25, 2020 in New York City.

U.S. stocks finished higher Tuesday, but off key levels following a long holiday weekend, as investors were emboldened by fresh coronavirus vaccine news and signs that global economies are crawling back from the pandemic shutdown.

How did benchmarks perform?

The Dow Jones Industrial Average  /zigman2/quotes/210598065/realtime DJIA -1.39%  climbed 529.95 points, or 2.2%, to end at 24,995.11, after trading above 25,000 earlier in the session.

The S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.56%  rose 36.32 points, or 1.2%, to close at 2,991.77, shy of its 200-day moving average of 2,999.81, according to FactSet data. The 200-day moving average is viewed by market technicians as a dividing line between long-term bullish and bearish trends. Meanwhile, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.53% gained 15.63 points, or 0.2%, finishing at 9,340.22.

The Dow finished the session 15.4% off its all-time closing high in February, the S&P 500 index off by 11.7% and the Nasdaq less than 5% from its record close.

What drove the market?

Investors were focusing on positive signs in the global economy, news of the gradual removal of economic restrictions related to COVID-19 and signs that Americans are beginning to feel safe enough to travel and congregate in larger groups.

“It’s all about optimism for the economy reopening,” said Megan Horneman, portfolio strategist at Verdence Capital Advisors. “That’s the big driver for the market today.”

See: Stock-market traders brace for ‘dogfight’ as S&P 500 tops 3,000 to trade above 200-day moving average

Travel-related stocks surged in the U.S. and Europe on data showing an increase in U.S. air travel and after news that a German airline will resume flights in July as travel restrictions are lifted in Spain.

Data from booking platform OpenTable shows Americans were returning slowly to restaurants in some parts of the country, The Wall Street Journal reported , along with numbers showing freight trucking activity picking up in recent weeks. The New York Stock Exchange trading floor also partially reopened Tuesday, with Plexiglas barriers to keep traders apart and capacity limited to one quarter its pre-virus levels.

Apple Inc. /zigman2/quotes/202934861/composite AAPL +0.36% said Tuesday that it would reopen dozens of U.S. stores as more regions begin to lift restrictions on business operations amid the COVID-19 outbreak.

Sahak Manuelian, managing director of equity trading at Wedbush Securities, called the global monetary and fiscal stimulus aimed at blunting the economic carnage from the coronavirus “something we’ve never seen,” adding that the trillions “sloshing around today, just in the U.S.” has helped push equities higher. “The money has to find a home.”

Also viewed as a positive, late-stage biotech company Novavax Inc . /zigman2/quotes/202614340/composite NVAX -2.03%  said it started human trials of its vaccine candidate in Australia. The first phase of the placebo-controlled study will enroll 135 healthy adults and the preliminary round of data from that study is expected in July. Big drugmaker Merck & Co. /zigman2/quotes/209956077/composite MRK -1.58% also said it would soon have two potential vaccines under its umbrella and an experimental drug against the coronavirus, joining rivals in the frantic search for medicines.

There are 10 vaccines in clinical evaluation and 114 in preclinical evaluation, according to a running tally by Fundstrat.

/zigman2/quotes/210598065/realtime
US : Dow Jones Global
25,706.09
-361.19 -1.39%
Volume: 389.18M
July 9, 2020 5:11p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,152.05
-17.89 -0.56%
Volume: 2.60B
July 9, 2020 5:11p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
10,547.75
+55.25 +0.53%
Volume: 3.62M
July 9, 2020 5:16p
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 382.73
+1.36 +0.36%
Volume: 31.41M
July 9, 2020 4:00p
P/E Ratio
30.00
Dividend Yield
0.86%
Market Cap
$1652.99 billion
Rev. per Employee
$1.98M
loading...
/zigman2/quotes/202614340/composite
US : U.S.: Nasdaq
$ 96.30
-2.00 -2.03%
Volume: 4.35M
July 9, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$5.70 billion
Rev. per Employee
$90,470
loading...
/zigman2/quotes/209956077/composite
US : U.S.: NYSE
$ 76.69
-1.23 -1.58%
Volume: 7.60M
July 9, 2020 4:03p
P/E Ratio
19.40
Dividend Yield
3.18%
Market Cap
$196.68 billion
Rev. per Employee
$615,159
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