Wall Street soared on Monday, over optimism in the reopening of the economy and news that another vaccine has been allowed for emergency use.
The Dow Jones industrial average jumped 2.2 percent, the S&P 500 rose just under 2 percent and the Nasdaq rose 1.9 percent.
Positive news for Boeing, one of the Dow heavyweights, helped boost the blue-chip index by 660 points early in the morning. United Airlines announced on Monday that it will buy 25 Boeing 737 Max aircraft, a vote of confidence in the struggling aviation giant, which will boost the share by almost 7 percent.
The market march follows a lower week for Wall Street, as inflationary fears lifted yields from the 10-year treasury notes to the highest levels in a year, and the technology Nasdaq’s worst sell-off in four months.
Monday’s investor confidence focused on positive vaccine news, after the Food and Drug Administration on Saturday granted permission for emergency use of Johnson & Johnson’s Covid-19 vaccine, which began shipping Monday morning.
The vaccine is ‘on trucks as we speak’, Johnson & Johnson CEO Alex Gorsky said on NBC’s ‘TODAY’ show on Monday. “We are sending 4 million literally as we speak. Within the next 24 to 48 hours, Americans should start receiving gunshots.”
Behind the overall economic optimism is ‘the expectation that the US will achieve the herd immunity between Memorial Day and the fourth of July’, said Mark Zandi, chief economist at Moody’s Analytics. “By the summer, we expect the recession of the pandemic to trigger a significant amount of demand that has built up in households that are stuck.”
The economy will also be “supercharged” once President Joe Biden’s stimulus package is passed, Zandi added.
The House voted Saturday to pass Biden’s $ 1.9 billion Bovid Covid-19 aid package, which includes $ 1,400 direct payments, a $ 400-a-week federal unemployment bonus, a $ 3,600-per-year allowance and billions of dollars in distributing the coronavirus vaccines and helping schools and local governments.
The bill now goes to the Senate, where a provision to increase the minimum wage is likely to be removed.