The market opened sharply higher on Wednesday as stocks got a boost from positive coronavirus vaccine news and blowout second-quarter earnings from Goldman Sachs.
The Dow Jones Industrial Average was up 0.7%, nearly 200 points, on Wednesday, while the S&P 500 rose 0.7% and the tech-heavy Nasdaq Composite gained 0.2%.
Moderna said its Covid-19 vaccine produced a robust immune response—or neutralizing antibodies—in all 45 patients of its early stage human clinical trials, according to a report published in The New England Journal of Medicine.
Shares of Moderna surged 5%, while stocks that would benefit from a reopening of the economy—including airlines and cruise lines—also jumped on the vaccine news.
The market moved higher on the back of a blowout second quarter from Goldman Sachs which easily topped Wall Street expectations, driven by a 93% surge in trading revenue.
Major banks like Morgan Stanley, JPMorgan, Wells Fargo and Citigroup all rallied on the back oof Goldman’s earnings results.
The positive vaccine news and bank earnings come amid a backdrop of surging coronavirus infections across the country, however: The U.S. reported a new daily record of more than 67,000 cases on Tuesday, according to data from Johns Hopkins University.
Cases in the U.S. are continuing to climb higher in recent weeks, with hotspots like Texas, California and Florida accounting for nearly half of all new cases on Tuesday.
Vaccine hopes and better-than-expected earnings are helping drive stocks higher, but the “reality is more nuanced than the headlines,” according to Vital Knowledge founder Adam Crisafulli. “There is still a large disconnect between the vaccine narrative and vaccine reality,” he points out, reiterating that investors are too optimistic about each bit of incremental positive data.
Stocks have moved sharply higher so far this week. The Dow rallied more than 500 points on Tuesday, as investors rotated out of big tech and into more cyclical stocks. JPMorgan kicked off earnings season by reporting better-than-expected second quarter earnings, boosted by a 79% surge in trading revenue. Wells Fargo, on the other hand, saw a $2.4 billion loss—its first quarterly loss since the 2008 financial crisis—and slashed its dividend to 10 cents per share.
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