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Dow up 300 points in final hour as stocks rebound amid vaccine hopes, IPO rush and corporate deal-making

U.S. stocks rose Monday, taking back a chunk of last week’s losses amid fresh hope for a coronavirus vaccine, a flurry of initial public offerings and potential corporate mash ups, including reports that Oracle may be forging a partnership with TikTok, the popular China-owned social media platform.

How are equity benchmarks performing?

The Dow Jones Industrial Average
DJIA,
+1.29%

rose 302 points, or 1.1%, to 27,969, after briefly climbing above its 28,000 threshold. The S&P 500
SPX,
+1.45%

added 39 points, or 1.2%, to 3,379. The Nasdaq Composite
COMP,
+2.03%

climbed 166 points, or 1.5%, to 11,022.

Equities ended Friday with the Dow posting a weekly loss of 1.7%, while the S&P 500 fell 2.5% and the Nasdaq Composite Index dropped 4.1%, marking its worst weekly plunge since the period ended March 20, according to Dow Jones Market Data.

What’s driving the market?

Equities on Wall Street were climbing on Monday, but off their best levels of the session, as investors embraced positive developments on the vaccine front and geared up for the year’s busiest week so far for initial public offerings.

Snowflake, a cloud company, planning to raise up to $3.08 billion at a valuation of up to $30.5 billion.

Read: IPO market gears up for busiest week since May of 2019 — Uber’s IPO week — with 12 deals on tap

“That’s another positive affecting the market today,” said John Carey, director of U.S. equity income at Amundi Pioneer, of the fresh slate of IPO and large batch of corporate tie-ups announced over the weekend.

“Otherwise, we’ve got terrible fires in the Western part of the country that’s just devastating, civil unrest and an acrimonious political environment as this campaign season heats up,” he told MarketWatch. “Certainly other things that could be front-and-center any other week,” he said, adding that instead it’s “off to the races.”

Gains in shares of financial companies, energy and real estate were leading the major stock indexes higher in afternoon trade Monday, after last week’s market turbulence led the technology-heavy Nasdaq Composite to post its steepest weekly decline since the height of the pandemic-driven selloff in March.

Renewed hopes of a vaccines were also credited with sparking the move higher on Wall Street.

Notably, reports that the AstraZeneca PLC
AZN,
+0.50%

 said over the weekend that clinical trials for its experimental coronavirus vaccine resumed after trials were paused due to an unexplained illness contracted by one of the participants who was given the vaccine. The restart of the trial for the vaccine may offer some optimism for the bulls to start the week.

In addition to the AstraZeneca report, Pfizer Inc.’s
PFE,
+2.85%

CEO Albert Bourla in an interview with CBS News’ “Face the Nation,” on Sunday said that the pharmaceutical giant should know if its own experimental COVID-19 vaccine works by the end of October — and if approved, it could be distributed in the U.S. by the end of the year.

At the same time, some investors say they aren’t getting overconfident about the prospects of a coronavirus vaccine, as it remains unclear how swiftly a successful remedy could be produced in mass quantities and distributed widely.

“The arrival of a vaccine will be a game changer. But even if we start to see anything near broad distribution in the first quarter of next year, the turnaround is going to be gradual. As we have seen with testing, getting broad distribution and ubiquitous access isn’t trivial,” said James Meyer, chief investment officer at Tower Bridge Advisors.

Shares of Oracle Corp.
ORCL,
+4.84%

jumped 4.9% after it was named a strategic partner for the U.S. operations of ByteDance-owned TikTok, according to The Wall Street Journal, citing people familiar. Such a deal would see Oracle beat Microsoft Corp.
MSFT,
+1.21%
,
which also was seen as a front-runner in negotiations for a deal to own or operate the U.S. operations of TikTok.

Oracle confirmed that its name was submitted by ByteDance to serve as the “trusted technology provider” for TikTok, in a proposal given to the Treasury Department.

An agreement to link up TikTok with a U.S. company comes amid rising tensions between America and China, with President Donald Trump threatening repeatedly to shut down TikTok in the U.S. if it isn’t sold to an American company by Sept. 15.

Elsewhere on the tech scene, chip maker Nvidia Corp.
NVDA,
+5.84%

was seen nearing a deal to buy British chip-designer Arm Holdings for more than $40 billion from SoftBank Group Corp.
SFTBY,
+7.89%

and drugmaker Gilead Sciences
GILD,
+2.56%

 struck a deal to acquire Immunomedics
IMMU,
+98.28%

and its breast-cancer drug Trodelvy for $21 billion, the Journal reported.

Which stocks are in focus?
  • Shares of Seattle Genetics
    SGEN,
    +14.51%

    rallied 15.1 on Monday after it announced two cancer-drug-related deals with Merck & Co. Inc.

  • Vaxart Inc.’s stock
    VXRT,
    +51.32%

    jumped 47.5% after the company said it had received the go-ahead from the Food and Drug Administration to begin testing its experimental oral COVID-19 vaccine in a Phase 1 clinical trial.

  • Verizon Communications Inc.
    VZ,
    +1.22%

     announced Monday an agreement to buy mobile provider Tracfone from America Movil
    AMOV,
    +8.10%

    in a cash-and-stock deal that could be worth up to $6.9 billion. Verizon’s shares were marginally higher by 1.3%.

  • Wyndham Destinations Inc.
    WYND,
    +9.29%

    shares were up 8.8% after it said that gross vacation ownership, or VOI, sales came to $168 million in July and August with the trend improving in August from July.

  • Gilead Sciences Inc.
    GILD,
    +2.56%

    will pay $21 billion to buy biotech Immunomedics Inc. and its breast-cancer drug. Gilead’s shares gained 3.1%.

  • Tempur Sealy International Inc.
    TPX,
    +8.52%

    shares soared 8.4% after the mattress maker announced that it expects a 30% year-over-year increase in net sales in the third quarter.

  • Uber Technologies, Inc.
    UBER,
    +2.70%

    shares were 2.6% higher Monday, up five session ins a row, and on pace for their highest close since Feb. 24 when it settled at $38.31 a share, according to Dow Jones Market Data.

  • Draft Kings Inc.
    DKNG,
    +15.91%

     shares soared 17% and were on pace for a record close, its first of 2020 since June 1, according to Dow Jones Market Data.

Which markets are on the move?

The 10-year Treasury note yield
TMUBMUSD10Y,
0.673%

was flat at 0.67%. Bond prices move inversely to yields.

Gold futures
GCZ20,
+0.98%

on the New York Mercantile Exchange rose 0.8% to settle at $1,963.70 an ounce. Meanwhile, U.S. crude futures
CL00,
-0.26%

fell 0.2% to end at $37.26 a barrel.

In global equities, the Stoxx Europe 600 index
SXXP,
+0.14%

rose 0.2% and the U.K.’s FTSE 100
UKX,
-0.09%

ended with a 0.1% loss. Japan’s Nikkei
NIK,
+0.65%

 closed 0.7% higher, while China’s CSI 300 index
000300,
+0.51%

gained 0.5%.

The ICE U.S. Dollar Index
DXY,
-0.33%
,
a measure of the greenback’s strength against its major rivals, weakened 0.3%.

Mark DeCambre contributed reporting

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