Wall Street soared Monday, on optimism in the reopening of the economy and news that another vaccine had been authorized for emergency use.
The Dow Jones Industrial Average jumped by 2.2 percent, the S&P 500 gained just under 2 percent and the Nasdaq rose by 1.9 percent.
Positive news for Boeing, one of the Dow heavyweights, helped pull the blue-chip index higher by around 660 points early in the morning trading session. United Airlines announced Monday it would be buying 25 Boeing 737 Max jets, a vote of confidence in the struggling aerospace giant, pushing the stock up by almost 7 percent.
The market rally follows a down week for Wall Street, as inflationary fears pushed up yields on 10-year Treasury notes to the highest levels in a year and the tech-heavy Nasdaq saw its worst sell-off in four months.
Monday’s investor confidence focused on positive vaccine news, after the Food and Drug Administration granted emergency use authorization on Saturday to Johnson & Johnson’s Covid-19 vaccine, which began shipping out Monday morning.
The vaccine is “on trucks as we’re talking,” Johnson & Johnson CEO Alex Gorsky said Monday on NBC’s “TODAY” show. “We’re shipping 4 million literally as we speak. Within the next 24 to 48 hours, Americans should start receiving shots in arms.”
Behind the overall economic optimism is “the expectation that the U.S. will achieve herd immunity sometime between Memorial Day and July Fourth,” said Mark Zandi, chief economist at Moody’s Analytics. “By summer, we expect the receding of the pandemic to unleash a considerable amount of demand that has built up in stuck-at-home households.”
The economy will also be “supercharged” once President Joe Biden’s stimulus package is passed, Zandi added.
On Saturday, the House voted to pass Biden’s $1.9 trillion Covid-19 relief package, which includes $1,400 direct payments, a $400-a-week federal unemployment bonus, a per-child allowance of up to $3,600 for one year and billions of dollars to distribute the coronavirus vaccines and to assist schools and local governments.
The bill now goes to the Senate, where a provision to raise the minimum wage is likely to be removed.