Stocks surge on Wall Street amid vaccine news, US election outcome

NEW YORK (AP) - Stocks are soaring worldwide Monday, and Wall Street is catapulting back to record heights on a burst of hope that the economy can get back to normal following encouraging data about a potential coronavirus vaccine.

The S&P 500 was 2.7% higher in afternoon trading after Pfizer said an early peek at its vaccine data suggests the shots may be 90% effective at preventing COVID-19, though that doesn't mean its release is imminent. The index at the heart of many 401(k) accounts is on track to close at an all-time high for the first time in more than two months.

Global markets also got a boost from a resolution to the long, market-bruising battle for the White House. Democrat Joe Biden over the weekend clinched the last of the electoral votes needed to become the next president.

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Treasury yields and oil prices burst higher as the vaccine news allows investors to feel confident about a stronger economic recovery on the way. The yield on the 10-year Treasury shot up from 0.81% before the announcement to 0.95%, a very big move for the bond market and one that shows stronger confidence in the economy. The key rate touched its highest level since March earlier in the morning, according to Tradeweb. U.S. oil jumped 8.3%.

Stocks of companies that most need the economy and the world to return to normal for their profits to heal led the way. An 11.9% surge for Chevron and 12% jump for The Walt Disney Co. amid hopes that people will start driving and flying to theme parks again helped the Dow Jones Industrial Average leap 1,255 points, or 4.4%, to 29,582, as of 2:38 p.m. Eastern time.

Cruise operators and owners of office buildings and shopping centers were among the market’s biggest winners on expectations people will feel comfortable again riding elevators to a desk or shopping in enclosed stores.

Carnival surged 34.1%, though it's still down by more than half for 2020 so far. It led a resurgence for what are called “value stocks,” ones whose prices look cheap and had gotten left behind by the rest of the market through the pandemic.

“People are buying those because they see a light at the end of the tunnel,” said Todd Morgan, chairman at Bel Air Investment Advisors.

The Big Tech companies that earlier drove the market higher in the pandemic, in large part because they didn’t need a “normal” economy to succeed, were lagging behind. That kept a lid on the gains for the Nasdaq composite, which rose by less than 0.1%

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Companies whose fortunes soared directly because the pandemic kept everyone hunkered at home, meanwhile, fell sharply. Zoom Video Communications, whose online meetings allow millions of remote students and workers to communicate, sank 14.9%. Grubhub, which benefited from people ordering in for dinner, dropped 10.2%. Etsy, whose online marketplace rode a wave of popularity for handmade masks, lost 12.6%.

If a vaccine for COVID-19 does indeed pan out, analysts say it's a “game changer” and just what the market had been waiting for. It underscores again how the coronavirus and its effect on the economy are the dominant concerns for investors, much more than who wins what in Washington.

The 90% effectiveness rate for Pfizer's potential vaccine is what struck Ajay Rajadhyaksha, head of macro research at Barclays.

"If that proves to be correct, it is a significant positive surprise and increases the odds of a quicker return to normalcy,” he said.

Building on last week's gains, the S&P 500 is up more than 10% in November. Still, analysts caution that several risks remain that could trip up the market's big recent gains.

Coronavirus counts continue to rise at troubling rates across much of Europe and the United States, so much that several European governments have brought back restrictions on businesses. In the U.S., confirmed coronavirus cases topped 10 million on Monday, the highest in the world.

In Washington, markets are banking on control of Congress remaining split between Democrats and Republicans, which can keep low tax rates and other pro-business policies the status quo in Washington, but that hinges on the result of run-off elections in Georgia in January.

Potential gridlock also makes any potential rescue package for the economy from Congress likely to be smaller than if Democrats had swept control of all of Washington. President Donald Trump, meanwhile, has refused to concede the election.

RELATED: Who won the election? Joe Biden projected as winner of 2020 presidential race

Many analysts expect trade tensions to de-escalate under a Biden presidency. Still, not all trade tensions are expected to vanish even if Biden rolls back some of the tariffs imposed by Trump on U.S. trading partners, especially China, in the past several years.

The European Union pressed ahead Monday with plans to impose tariffs and other penalties on up to $4 billion worth of U.S. goods and services over illegal American support for plane maker Boeing. That followed a World Trade Organization ruling in the U.S.’s favor over EU support for Airbus.

In Asian markets, Japan’s Nikkei 225 rose 2.1%, South Korea’s Kospi advanced 1.3%, Hong Kong’s Hang Seng gained 1.2% and stocks in Shanghai rose 1.9%.

Customs data released Saturday showed China’s export growth accelerated in October, boosting the total so far this year back above pre-coronavirus levels for the first time. Exports in October rose 11.4% over a year earlier to $237.2 billion, up from September’s 9.9% gain, while imports rose 4.7% by value to $178.7 billion, decelerating from the previous month’s 13.2% surge.

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Alice Fung in Hong Kong contributed to this report.