Wall St headed higher as travel stocks rally on vaccine roll-out
“There is no question the market is very optimistic about the vaccines finally being delivered,” said Thomas Hayes, managing member at Great Hill Capital Llc in New York
Wall Street's main indexes were set for a strong open on Monday as travel stocks surged on the launch of a nationwide Covid-19 vaccine campaign, while Alexion Pharmaceuticals jumped following a bumper buyout offer from Britain's AstraZeneca.
Shipments of the Pfizer-BioNTech vaccine fanned out to distribution points across the United States on Sunday, with injections set to begin later on Monday.
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 bought economic activity to a halt.
"There is no question the market is very optimistic about the vaccines finally being delivered," said Thomas Hayes, managing member at Great Hill Capital Llc in New York.
Cruise operators Carnival Corp and Royal Caribbean Cruises rose 4.7% and 3.1%, respectively, in premarket trade, while stocks of major airline operators rose between 1.5% and 3.0%, with American Airlines Group leading gains.
Travel and leisure stocks are the worst hit by restrictions on movement due to the virus outbreak, and have reacted positively to any vaccine-related news.
At 8:19 a.m. ET, Dow e-minis were up 247 points, or 0.82%, S&P 500 e-minis were up 27 points, or 0.74%, and Nasdaq 100 e-minis were up 55.5 points, or 0.45%.
Alexion Pharmaceuticals Inc surged 31.3% and was set to hit a 4-1/2 year high after drugmaker AstraZeneca said it would buy the US biotech firm for $39 billion in one of this year's biggest mergers. AstraZeneca's US-listed shares fell 5.8%.
"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," Hayes added.
Shares of delivery firms FedEx Corp and United Parcel Service Inc, which are leading the vaccine distribution project, rose about 1.7% and 1.9%, respectively.
US stocks had rallied through the past few weeks, with the S&P 500 touching a series of record highs as markets bet on the swift approval and roll-out of a vaccine.
But uncertainty over more fiscal stimulus had stifled gains, 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.
Among other movers, ecommerce company Alibaba Group Holding Ltd shed 1.5% after China warned its internet majors of more anti-trust scrutiny, slapped fines and announced probes into deals involving Alibaba and Tencent Holdings Ltd.