• The Dow Jones industrial average and S&P 500 closed sharply higher on Monday after hitting intraday records earlier in the session.
  • Major US indexes were lifted by news that Pfizer and BioNtech successfully developed a COVID-19 vaccine that demonstrated an efficacy rate of more than 90%.
  • The development is thought to remove significant uncertainty from the market as investors see a light at the end of the COVID-19 pandemic tunnel.
  • While cyclical stocks in the airline, restaurant, and financial sectors soared, popular work-from-home names like Zoom, Peloton, and Netflix plummeted.

Progress in the development of a COVID-19 vaccine was all investors need to hear to help propel stocks to hit new heights on Monday.

Both the S&P 500 and the Dow Jones industrial average closed sharply higher after Pfizer and BioNTech announced that their COVID-19 vaccine was found to be more than 90% effective in preventing the illness during its phase-three trial, setting it up for an emergency rollout. Both indexes surged to intraday records during the session.

The drugmakers said no serious safety concerns had been observed throughout the trial, which enrolled about 44,000 patients.

Pfizer and BioNTech are now ramping up production of the vaccine. They said they expected to produce more than 50 million doses by the end of the year and more than 1 billion doses in 2021.

Here’s where US indexes stood at the 4 p.m. ET close on Monday:

  • S&P 500: 3,550.50, up 1.2%
  • Dow Jones industrial average: 29,157.97, up 3% (835 points)
  • Nasdaq composite: 11,713.78, down 1.5%

The vaccine-progress news rippled through various areas of the stock market. Pfizer soared 15% at intraday highs as investors expect the company to benefit from a swift rollout of the vaccine. But Pfizer wasn’t the only vaccine company to surge on Monday, as Novavax leaped as much as 13% after the FDA granted it a fast-track designation.

The cyclical reopening trade also fuelled gains on Monday morning. Airline and cruise-line stocks surged, as investors likely anticipate pent-up demand for travel once a vaccine has been widely administered. AMC Entertainment Holdings led a broad rally in movie-theatre stocks, spiking roughly 48% on Monday morning.

Berkshire Hathaway soared on stock purchases, record buybacks, and the Pfizer vaccine news.

But technology stocks that saw a surge in business due to the COVID-19 pandemic didn’t participate in Monday’s jump higher.

Work-from-home stocks suffered on the news, as people are more likely to spend less time at home and get back to offices once the COVID-19 pandemic is in the rearview mirror. Zoom, Peloton, DocuSign, and Netflix cratered on Monday.

Elsewhere, Biogen plummeted 32% after a Food and Drug Administration advisory committee signalled that its Alzheimer’s therapy would not receive approval early next year.

Despite Monday’s strong move in stocks, markets could be set up for a continued rise into year-end, according to Fairlead Strategies Katie Stockton, who sees a 3,825 price target in the S&P 500 headed into early next year.

On the economic front, the combination of a Joe Biden presidency and the administration of a COVID-19 vaccine could help boost GDP growth in 2021, according to Goldman Sachs.

Oil prices soared. West Texas Intermediate crude climbed as much as 11%, to $US41.33 per barrel. Brent crude, oil’s international benchmark, jumped 10%, to $US43.48 per barrel, at intraday highs.

Gold slid on Monday, falling as much as 5.2%, to $US1,850.51 per ounce.

This article first appeared on Business Insider Australia, Australia’s most popular business news website. Read the original article. Follow Business Insider on Facebook or Twitter.