Dow and S&P 500 Reach All-Time Highs After Vaccinations (Comprehensive)

Value Stocks Rally as Moderna Vaccine Effectiveness Proven Following Pfizer
Dow Jones Index Nears 30,000 Milestone

[Asia Economy New York=Correspondent Baek Jong-min] The Dow Jones Industrial Average and the S&P 500 index hit record highs following news that the U.S. pharmaceutical company Moderna developed a vaccine for the novel coronavirus disease (COVID-19). As expectations for economic recovery rose with the vaccine development, investors flocked not only to tech stocks but also to value stocks. In particular, the Dow approached the unprecedented 30,000 mark.

[Image source=Reuters Yonhap News]

On the 16th (local time) at the New York Stock Exchange, the Dow rose 470.63 points (1.6%) to close at 29,950.44, and the S&P 500 increased 41.76 points (1.16%) to finish at 3,626.91. The Nasdaq also closed up 94.85 points (0.8%) at 11,924.13.

On that day, the Dow recovered to pre-COVID-19 levels and recorded an all-time high closing price. Unlike the Nasdaq, which is tech-heavy, the Dow, centered on traditional stocks, had a slower recovery after the sharp decline caused by the COVID-19 crisis.

The Dow's rise was led by companies related to airlines and oil. This reflected expectations for economic recovery and travel mobility following the vaccine development. Shares of the cruise company Carnival rose 9.7%, while United Airlines and ExxonMobil each increased by more than 5%. Moderna, the 'hero' of the day, surged 9.7%.

Shima Shah, Chief Global Strategist at Principal Global Investors, told the Wall Street Journal (WSJ), "2020 is a year we will never forget, but the stock market is completely erasing those memories."

Notably, the Nasdaq also rose slightly that day. Apple and Facebook increased by 0.9% and 0.7%, respectively. James Acy, Chief Investment Manager at Aberdeen Standard Investments, said, "This reflects that there is still a long way to go from the vaccine results to economic normalization." Netflix and Zoom Video shares declined.

As investments poured into risk assets, safe-haven assets weakened. The 10-year U.S. Treasury yield rose slightly that day, entering the 0.9% range. An increase in bond yields means a decline in bond prices.

Expectations for economic recovery due to the vaccine effect also strengthened crude oil prices. West Texas Intermediate (WTI) crude oil for December delivery closed up 3% ($1.21) at $41.34 per barrel.

This content was produced with the assistance of AI translation services.