Travel stocks rally after Moderna's vaccine progress lifts hopes for near-term reopening
The biotech company announced Monday morning that its experimental coronavirus vaccine was 94.5% effective at preventing COVID-19 in a preliminary analysis. The update comes one week after Pfizer and BioNTech revealed similarly positive results from early trials of their own vaccine. While both candidates still need to receive approval from the US Food and Drug Administration, their supposed effectiveness suggests a nationwide rollout could come in 2021.
The news boosted shares of companies hit hardest by the virus and stay-at-home restrictions. United Airlines leaped as much as 8.6%. American Airlines and Delta both jumped roughly 6% shortly after the vaccine news.
The moves mimic the dislocations seen after previous encouraging vaccine updates. Stocks that would benefit the most from a full economic recovery bounce higher, while those that thrived through the pandemic slide. Monday was no different, as stay-at-home stocks such as Zoom, Netflix, and Peloton all traded lower.
Both Moderna and Pfizer aim to apply for emergency use authorization later this month. Approval would allow the companies to quickly begin distributing their vaccines to the most vulnerable populations. Even if both candidates are approved by regulators, vaccine supply is set to be very limited.
Still, new hopes for a near-term breakthrough lifted the broader stock market. The Dow Jones industrial average opened 375 points higher and closed in on an all-time high. The Nasdaq composite erased early gains underperformed peer indexes as major tech names fell.
Oil futures extended gains as traders hoped for a vaccine to revive travel-based consumption. West Texas Intermediate crude contracts gained as much as 4.9%, to $42.09 per barrel.
This article originally appeared on Markets Insider