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Stocks rebounded Monday from losses last week on optimism that the U.S. economy might start to recover from the coronavirus pandemic after drug maker Moderna released promising early results for a vaccine.
The Dow Jones industrial average soared 750 points. The Standard & Poor’s 500 climbed nearly 3% after U.S. stocks turned in their biggest weekly loss in nearly two months on Friday.
Shares of Moderna surged 25% after the biotechnology company reported encouraging phase one results for a potential vaccine in a small early stage clinical trial. It showed the production of antibodies to the virus in all of its 45 trial participants, Moderna said, a positive sign of the vaccine’s potential to prevent infection with the virus.
Investors appear to be looking past the outbreak to a recovery despite rising infection numbers in the United States, Brazil and some other countries. Forecasters warn the latest market buoyancy might be premature and a return to normal could be some way off.
“There’s still a long road to travel before this vaccine would be available even if it proves to be effective, but any light at the end of the tunnel is welcome,” Paul Hickey, co-founder at Bespoke Investment Group, said in a note.
In the U.S., there have been more than 89,000 deaths and almost 1.5 million confirmed cases, according to the Johns Hopkins University data dashboard. Worldwide, the virus has killed more than 315,000 people and has infected more than 4.6 million.
Global financial markets also received a boost after the head of the U.S. Federal Reserve expressed optimism that the American economy might start to recover this year from the pandemic.
In an interview with CBS’s “60 Minutes,” Fed Chair Jerome Powell expressed optimism Sunday the U.S. economy can begin to rebound in the second half, assuming the coronavirus doesn’t erupt in a second wave. He said a full recovery won’t likely be possible before the arrival of a vaccine.
Once the outbreak has been contained, Powell said, the economy should be able to rebound “substantially.”
Powell and Treasury Secretary Steven Mnuchin are due to appear Tuesday before a Senate panel to report on recovery efforts.
In energy markets, benchmark U.S. crude gained $2.78 to $32.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.87 to $29.43 on Friday. Brent crude, used to price international oils, advanced $2.08 to $34.58 per barrel in London. It rose $1.37 the previous session to $32.50.
In Europe, the FTSE 100 in London gained 2.4% and the DAX in Frankfurt advanced 2.9%. France’s CAC 40 rose 2.2%. In Asia, the Shanghai Composite Index rose 0.2% and Tokyo’s Nikkei 225 gained 0.5%. The Hang Seng in Hong Kong advanced 0.6%.
Contributing: The Associated Press
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