US open: Dow on track for record close amid vaccine optimism

Wall Street stocks turned in early gains on Monday as the Dow Jones was on track for a record close thanks to further positive vaccine headlines.

As of 1535 GMT, the Dow Jones Industrial Average was up 1.33% at 29,873.26, while the S&P 500 was 0.94% firmer at 3,618.75 and the Nasdaq-100 came out the gate 0.67% stronger at 11,908.81.

The Dow opened 393.45 points higher on Monday, extending gains recorded in last week's vaccine-fuelled rally despite US Covid-19 cases passing 11.0m over the weekend, according to Johns Hopkins University.

Although the country had recently hit a fresh daily record of 184,000 new daily cases, Moderna was in focus on Monday after revealing that its vaccine candidate had shown itself to be 94.5% effective at protecting people from Covid-19 and was proven to last for up to 30 days in household refrigerators and at room temperature for as much as 12 hours.

While Pfizer and BioNTech may have directed much of last week's limelight away from the US presidential election with news that their Covid-19 vaccine candidate was as much as 90% effective in treating the coronavirus, BioNTech chief executive Ugur Sahin has now also claimed that transmission of Covid-19 would be reduced by "maybe 50%" following the vaccine rollout, leading to a "dramatic reduction of the pandemic spread".

Infinox's Ulas Akincilar said: "Think Pamplona with skyscrapers. Wall Street is bracing itself for another wild bull run. Last week's Biden/vaccine double-whammy powered the S&P 500 to a record close on Friday, and it is now set to pick up where it left off.

"With another US-led vaccine trial reporting incredibly encouraging results, the markets are daring to hope that the tide will soon turn against Covid. These are preliminary results and no one vaccine will be a silver bullet. But get a magazine full of bullets and the war can be won. With the US infection rate and death toll still rising at truly horrific speed, the vaccine rollout can’t come soon enough."

On the macro front, manufacturing activity in the New York jurisdiction unexpectedly deteriorated in November, according to the New York Fed's Empire State index, which fell to 6.3 from 10.5 in October, missing consensus expectations for a reading of 13.5. The new orders index slid to 3.7 in November from 12.3 the month before, while the shipments index fell 11.5 points to 6.3 and the index for future business conditions was steady at 33.9, suggesting that firms remained optimistic.

Still to come, Federal Reserve presidents Richard Clarida and Mary Daly will deliver comments later in the day.

In corporate news, travel stocks were in the green yet again as investors grew increasingly confident about an eventual return to normal economic activity.