(Reuters) – U.S. stock indexes were set to open sharply higher on Monday on optimism fueled by encouraging data from a potential COVID-19 vaccine trial, with investors also counting on more stimulus to rescue the economy from a deep economic slump.

Investors have kept a close eye on the vaccine programs of several drugmakers, cheering any positive development amid fears of a second wave of infections as governments start easing restrictions.

Drugmaker Moderna Inc (MRNA.O) said its experimental vaccine for COVID-19 showed promising results in an early stage study. The stock jumped 26% in premarket trade.

Markets were also encouraged by Federal Reserve Chairman Jerome Powell’s remarks over the weekend on a gradual economic recovery, and his affirmation that more monetary stimulus was on the way if required.

Powell also said the most important data for the U.S. economy right now are the “medical metrics” around the coronavirus pandemic and sectors such as travel and entertainment would remain under pressure.

“Powell has also indicated something that was very important – that the full recovery is based on finding a vaccine. It’s basically fueling hope. It’s all about the economy and the reopening of some of the states and reopening countries around the world,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

Wall Street’s three major indexes closed higher on Friday as investors weighed worries about Sino-U.S. trade relations and weaker-than-expected U.S. economic data against growing optimism that easing coronavirus restrictions would boost activity this month.

However, they posted a weekly loss as uncertainty still persisted over how the world would emerge from the coronavirus. U.S. stock indexes have stuck to a tight range after recovering from multi-year lows hit in March.

Cruise line operators Carnival Corp (CCL.N), Royal Caribbean Cruises Ltd (RCL.N), Norwegian Cruise Line Holdings Ltd (NCLH.N) jumped more than 7% as well as carriers like Delta Air Lines Inc (DAL.N) and United Airlines Holdings (UAL.O) gained more than 7% and 8.4%.

At 8:11 a.m. ET, Dow e-minis 1YMcv1 were up 663 points, or 2.82%. S&P 500 e-minis EScv1 were up 74.5 points, or 2.62% and Nasdaq 100 e-minis NQcv1 were up 186.25 points, or 2.05%.

General Motors Co (GM.N) rose 5.2% and Ford Motor Co (F.N) 4% as they prepared to reopen their North American factories in a push to restart work in an industry that accounts for about 6% of U.S. economic activity.

Oil and gas heavyweights Occidental Petroleum Corp (OXY.N), Halliburton Co (HAL.N), Schlumberger (SLB.N) jumped between 5.5% and 5.8% after oil prices surged on the prospect of higher demand. [O/R]

Apple Inc (AAPL.O) rose 1.9% as the iPhone maker said it would reopen more than 25 of its branded stores in the United States this week.

Reporting by Ambar Warrick and Medha Singh in Bengaluru, additional reporting by Pawel Goraj in Gdansk; Editing by Saumyadeb Chakrabarty

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Saudi Arabia to take on billions in debt to survive the oil price crisis

Al-Jadaan told media this week that the Kingdom might issue bonds worth $26.57 billion (100 billion riyals) this year in addition to an earlier issue of $31.88 billion (120 billion riyals) worth of debt. Saudi Aramco, for its part, is…

Under Armour moves to terminate $280 million deal with UCLA

Under Armour is attempting to terminate its 15-year $280 million apparel and footwear deal with the University of California, Los Angeles. “Under Armour has recently made the difficult decision to discontinue our partnership with UCLA, as we have been paying…

Virus puts brakes on US economic engine: consumer spending

The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Friday related to the global economy, the work place and the spread of the virus. ———————————————————————— CONSUMER DURESS: The consumer drives…

Canton Fair gears up to go online

China’s flagship trade event looks to engage exporters amid pandemic Chinese companies have been gearing up to fulfill their overseas orders via the internet as the country’s largest trade event is scheduled to be conducted online due to the spread…