Dow futures surge 1,400 points as Pfizer says vaccine effective

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A new coronavirus stimulus deal is still in the works between Democrats and Republicans, bu they can’t agree on a conclusion. USA TODAY

U.S. stocks were poised to open sharply higher on Monday after Pfizer said its experimental vaccine was more than 90% effective in preventing COVID-19, a potentially huge boost to world health after the pandemic battered the global economy in the spring and led to more than one million deaths.

Futures for the Dow Jones industrial average surged 1,700 points on the news, after already being up 400 points following Democrat Joe Biden’s defeat of incumbent Donald Trump in the U.S. presidential election.

S&P 500 futures jumped 4.6% after the broad index posted its best week since April following an election-fueled rally last week. 

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Global markets were buoyed after Pfizer and German partner BioNTech released early study results Monday indicating that their vaccine, BNT162b2, prevented more than 90% of infections from the virus that causes COVID-19.

Pfizer is the first drug company to release data from a large, Phase 3 trial as it and several other companies are working to produce a COVID-19 vaccine that is safe and effective.

Industries tied to the economy reopening rallied following the developments, including airlines, casino and restaurant companies. In premarket trading, Delta Air Lines surged 16% and Las Vegas Sands jumped 12%.

The vaccine news comes as the country’s new coronavirus cases are setting records once again. The U.S. recorded 126,742 cases Saturday, the third day in a row the total exceeded 120,000, according to data from Johns Hopkins. The United States, with about 4.3% of the world population, has about 20% of the cases.

Financial markets rallied around the world Monday after they were given their first opportunity to react to Joe Biden’s victory in the U.S. presidential election. 

Stock futures rose overnight following the president-elect’s pledge to bring unity to the U.S. after four tumultuous years under the Trump administration.

With Congress likely to remain split between Democrats and Republicans, that raised investors’ expectations that business-friendly policies may stick around, regardless of who holds the presidency.

Investors were additionally taking in what a Biden presidency could mean for trade tensions – the expectation being they will be de-escalated. 

“Markets have taken the view that there’s very little U.S. President Trump can do to overturn the U.S. election result,” Stephen Innes, chief global markets strategist at AxiCorp Financial Services, an online currency broker, wrote in a note to investors.

In Asia, Japan’s Nikkei 225 surged 2.1% to 24,839.84. Australia’s S&P/ASX 200 added 1.8% to 6,298.80. South Korea’s Kospi advanced 1.3% to 2,446.61. Hong Kong’s Hang Seng rose 1.3% to 26,035.62, while the Shanghai Composite gained 1.6% to 3,364.86.

Key European benchmarks in London, Frankfurt and Paris all pushed higher. 

France’s CAC 40 jumped 1.7% in early trading to 5,045.70, while Germany’s DAX surged nearly 2.0% to 12,724.48. Britain’s FTSE 100 gained 1.3% to 5,987.32.

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Jackson Wong, asset management director at Amber Hill Capital in Hong Kong, said markets expect a Biden presidency to improve diplomacy and trade between the U.S. and Asia. Wong expects a “better growth perspective” in the medium to long-term.

Ulas Akincilar, head of trading at INFINOX, an online trading platform, said in a commentary that “markets are reassured by the thought that a transition is underway, with or without Trump.” He said investors were buoyed by Biden’s “clear determination” to take the coronavirus pandemic seriously, “and the perception that he will have both the drive and the political skill to get a big new fiscal stimulus through Congress quickly.”

In energy trading, U.S. benchmark crude gained $3.16 to $40.30 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose $3.08 to $42.53 a barrel.

The dollar rose to 104.38 Japanese yen from 103.35 yen late Friday. The euro cost $1.1889, up from $1.1875.

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Contributing: Associated Press

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