Energy, travel stocks surge on Pfizer vaccine hopes

NEW YORK (Reuters) - Shares of stocks that have been demolished as the coronavirus and related lockdowns have crippled the global economy surged on Monday following positive news from Pfizer PFE.N and its German partner BioNTech 22UAy.DE about is experimental COVID-19 vaccine.

FILE PHOTO: A logo for Pfizer is displayed on a monitor on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 29, 2019. REUTERS/Brendan McDermid

Pfizer shares jumped 10.16%, although they were off earlier highs, after the company said the vaccine was more than 90% effective in a large-scale clinical trial for which it will now seek a U.S. emergency use authorization. U.S.-listed shares of BioNTech were up 9.89%.

While Pfizer shares were higher on the news, the overall healthcare sector .SPXHC was underperforming the broader S&P 500, in large part due to a sharp decline in Biogen BIIB.O after a U.S. Food and Drug Administration panel voted against its Alzheimer’s treatment.

The energy sector .SPNY, down more than 50% through Friday's close as reduced travel sapped demand for oil and gas, shot up 14.82% and was on track for its biggest daily percentage gain since March 24. Exxon Mobil XOM.N gained 13.39% and Valero Energy VLO.N soared 29.81%.

Banks .SPXBK, down more than 34% through Friday, climbed 12.66% and were also on track for their biggest one-day percentage gain since March 24 as bond yields soared and the U.S. yield curve steepened. A similar reaction was seen in Europe, with French banks Societe Generale SOGN.PA and BNP Paribas BNPP.PA, closing up 18%.

“It’s all about the vaccine. If Pfizer’s vaccine is as good as people are saying it is that’s a game changer for consumer behavior and a lot of the trends we’ve seen of the cyclical sectors being depressed are going to reverse on that hope that this is the beginning of the end of our dealing with COVID-19,” said Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, North Carolina.

(GRAPHIC: S&P 500 sectors gain amid vaccine hopes - )

Airlines .SPLRCALI, down more than 45% through Friday, jumped 15.22%, led by gains in Delta Air Lines DAL.N, up 15.07% and Southwest Airlines LUV.N as a vaccine would reduce the fear of traveling in an enclosed space.

Other travel-related stocks also moved higher. Disney DIS.N rose 11.29% while fellow theme-park operator Six Flags SIX.N advanced 17.07%.

The S&P hotels, restaurants & leisure index .SPLRCHRL shot up 5.43% with cruise lines Carnival Corp CCL.N and Royal Caribbean RCL.N each surging more than 30% higher. Casino operator Wynn Resorts WYNN.O rose 26.26% while hotel operators Marriott International MAR.O and Hilton Worldwide HLT.N each gained more than 10%.

Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago, said the news was particularly good for companies in services industries. “The services part of the economy can recover strongly,” he said.

"It's affecting services across the board," he said, noting strong gains in Disney, Expedia EXPE.O and other travel-related stocks.

On the flip side, names that have benefited from work-from-home policies and travel restrictions, as Peloton Interactive PTON.O and Zoom Video ZM.O tumbled 15.55% and 13.48%, respectively.

Reporting by Julien Ponthus, additional reporting by Thyagaraju Adinarayan, Caroline Valetkevitch and Sinéad Carew; Editing by Toby Chopra and Nick Zieminski