Wall Street’s main stock indexes were higher on Friday following a volatile week that saw promising trial results from Pfizer’s and BioNTech’s COVID-19 vaccine boost United States markets at the start of the week, only to see skyrocketing infections in the US and elsewhere weigh on investor sentiment as the week wore on.
The Dow Jones Industrial Average was up more than 205 points or 0.71 percent at the start of trading in New York.
The broader S&P 500 index – a proxy for the health of US retirement and college savings accounts – rose 0.74 percent, while the Nasdaq Composite Index was up jumped 0.70 percent.
Despite positive vaccine news on Monday, by mid-week investors came to grips with the brutal reality that COVID-19 infections are spreading unchecked and deep economic scars are setting in.
“The Pfizer-BioNTech news boosted markets this week, but this is good news with caveats,” Neil Shearing, Chief Economist at Capital Economics wrote in a Friday note.
Federal Reserve Chair Jerome Powell echoed similar apprehension on Thursday in remarks to a virtual European Central Bank forum.
While positive vaccine news is great for the medium term, “from our standpoint it is too soon to assess with any confidence the implications of the news for the path of the economy especially for the near term,” Powell said, adding: “The next few months could be challenging.”
The jobs recovery is slowing down. While many returned to work after restrictions were eased following spring’s pandemic peak, millions of Americans remain unemployed. And the labour market landscape is likely to become bleaker still as states once again tightening restrictions on businesses and economic activity to curb the spiralling infections.
On Thursday, the mayor of Chicago issued a month-long stay-at-home advisory encouraging residents to stay home and only leave for essential activities such as school and work.
Medical professionals treat a patient infected with the coronavirus disease (COVID-19) at United Memorial Medical Center in Houston, Texas, United States [File: Callaghan O’Hare/Reuters]The beginning of the week brought some semblance of what it would feel like getting back to normal.
The vaccine news lifted shares of airlines, cruise lines and hotels – all companies hammered by pandemic restrictions and travel bans.
But as businesses are forced to shutter across the US and travel restrictions return, federal fiscal stimulus will be essential to help businesses – small and large – stay above water. The funds will be critical to helping Americans keep a roof over their heads and food on the table.
Washington has failed in recent months to put aside partisan differences to pass a historic package. Many on Wall Street are expecting a slimmed-down $1 trillion stimulus to pass around year’s end.
Among stocks to watch on Friday, shares of Walt Disney Co jumped 3.45 percent after reporting better than expected quarterly earnings and gaining more subscribers than expected to its streaming service Disney+.
And shares of Cisco Systems Inc rose more than 5.68 percent after the company reported strong earnings.