By Yasin Ebrahim
Investing.com - The Dow on Monday racked up its biggest one-day rally in more than a month, as news of progress on a potential Covid-19 vaccine and hopes of further central bank stimulus pushed stocks higher.
The Dow Jones Industrial Average rose 3.85%, or 911 points, the biggest one-day gain since Apr. 6. The S&P 500 gained 3.08%, while the Nasdaq Composite added 2.44%.
Moderna (NASDAQ:MRNA) said early-stage clinical results suggested its vaccine has a "high probability" to provide protection from coronavirus disease, sending its share 19.8% higher.
The positive update from Moderna bolstered investor hopes that a vaccine may be found sooner rather later, strengthening expectations for a quicker economic recovery at a time many countries continue efforts to reopen their economies.
Travel and tourism sectors, which have been hit hard by the pandemic, were up sharply, led by cruise companies, hotels, and airlines.
Marriott International (NASDAQ:MAR), MGM Resorts (NYSE:MGM), United Airlines (NASDAQ:UAL) and Norwegian Cruise Line (NYSE:NCLH) were among the biggest movers, with the latter up about 18%.
Uber Technologies (NYSE:UBER), meanwhile, was also in rally mode, up 3.6%, as the ride-sharing company announced that it would cut 3,000 jobs and focus on its core ride-hailing and food delivery businesses as it continues on its path toward profitability.
Energy stocks jumped on a surge in oil prices amid ongoing bets for a recovery in crude demand and on easing worries about storage capacity.
Exxon Mobil (NYSE:XOM) was up 8%, Apache (NYSE:APA) rose 12% and Halliburton (NYSE:HAL) gained 17%
On the economic front, investors digested better-than-expected housing data, as the NAHB Housing Market Index rose to a reading of 37 in May, topping economists' forecasts of 35.
The bold start to the week on Wall Street was also helped by growing expectations for more stimulus after Federal Reserve Jerome Powell signal the central bank stands ready to roll out more stimulus to support the economy.
"We’re not out of ammunition by any shot," Powell said. There was "no limit" to what the central bank can do with its lending programs that were announced in March, Powell added.
Powell returns to the spotlight on Tuesday and is expected to reiterate the Fed's commitment to support the economic recovery, according to a statement that Powell will deliver to the Senate Committee on Banking, Housing, and Urban Affairs.
“The Federal Reserve’s response to this extraordinary period has been guided by our mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote stability of the financial system,” according to the statement. "We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response."