Wall Street treading water to start the week
Wall Street’s main indexes have inched higher on Monday (US time) as consumer stocks rose on the launch of a nationwide COVID-19 vaccine campaign, while Alexion Pharmaceuticals jumped on a $US39 billion ($51.7 billion) buyout offer from AstraZeneca in one of the year’s biggest deals.
Administration of the vaccine developed by Pfizer and its German partner BioNTech began on Monday, after the shot received emergency-use approval from federal regulators last week.
The inoculations are seen as pivotal toward ultimately halting the COVID-19 pandemic, which has claimed more than a million lives around the world and brought economic activity to a halt.
Consumer discretionary stocks were among the best performing sectors on the S&P 500 on Monday, while travel and leisure stocks, which are among the worst hit by the virus outbreak, also gained.
Alexion Pharmaceuticals Inc was among the top boosts to the S&P 500 and the Nasdaq, surging 31 per cent to a 4-1/2 year high after British drugmaker AstraZeneca said it would buy the US biotech firm. AstraZeneca’s US-listed shares fell 6.1 per cent.
“It is a sign that animal spirits are back … companies are reluctant to do deals when they have a negative outlook on the future, but the fact that you are seeing these types of big deals on merger Mondays is a sign of things to come,” said Thomas Hayes, managing member at Great Hill Capital in New York.
In early afternoon trade, the Dow Jones Industrial Average is 0.1 per cent higher, the S&P 500 was up 0.1 per cent, and the Nasdaq has added 0.7 per cent. At 4.53am AEDT, futures are pointing to a flat start for the ASX.
Uncertainty over more fiscal stimulus had cut short a recent rally in US stocks, after the Senate last week approved a one-week extension of federal funding to avoid a government shutdown and to provide more time for negotiations on coronavirus relief and an overarching spending bill.
“Equities have performed very strongly in what has been a very difficult economic environment … there is some vulnerability there if the market concludes that fiscal support is at its end,” Eric Winograd, senior economist at AllianceBernstein told the Reuters Global Market Forum.
Focus was also on early voting in a pair of US Senate races in Georgia that will determine control of the chamber and heavily influence lawmaking.
E-commerce company Alibaba Group Holding shed 2.6 per cent after China warned its internet majors of more anti-trust scrutiny, slapped fines and announced probes into deals involving Alibaba and Tencent Holdings.
Electric-car maker Tesla rose 4 per cent as anticipation of the firm’s addition to the S&P 500 benchmark next week offset a report of production delays.
Walt Disney fell about 2.7 per cent after rallying on Friday and was the biggest drag on the Dow after BMO Capital Markets downgraded the stock.
The S&P index recorded 25 new 52-week highs and no new lows, while the Nasdaq recorded 196 new highs and 11 new lows.
Reuters
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