Updated at 1:03 p.m. ET
Stocks soared to record highs Monday after Pfizer said its experimental COVID-19 vaccine was more than 90% effective, providing a major dose of hope for the battered global economy.
The Dow Jones Industrial Average was up about 1,350 points by midday trading, an increase of 4.8%, after earlier surpassing its record high from February.
The S&P 500 rose was up 3.3% after also hitting a record high earlier.
Airlines and travel-related companies, which have been slammed by the pandemic, were up sharply. United Airlines was up by 19%, while Delta was up 15%. Carnival was up 37%.
Other sectors that would directly benefit from improving business activity, such as banks, also gained. Wells Fargo was up 12%.
However, tech shares were lower after surging during the pandemic when lockdowns kept many people at home. Netflix was down nearly 6%, while Amazon was down 2.4%.
The pandemic has led to millions of layoffs and business closures around the world, bringing the global economy to a grinding halt. Recently, cases of the virus have surged again in Europe and the United States, forcing government officials to reimpose lockdowns.
A vaccine is seen as a key catalyst for controlling the pandemic.
Earlier on Monday, pharmaceutical giant Pfizer and its partner BioNTech said their experimental vaccine was more than 90% effective in preventing COVID-19. It is the first of the vaccine attempts to reach the clinical milestone.
“Even as rising case numbers have triggered modest news restrictions in the U.S. and Europe, the base case remains that vaccines and improved treatment will bring the pandemic under control enough to allow economic activity to recover during the first half of next year,” says Christopher Smart, chief global strategist at Barings Investment Institute.
Pfizer surged 11% on the news while BioNTech was up 13%.
Markets were already expected to open higher on Monday after former Vice President Joe Biden was elected president over the weekend.
Stocks have been trading higher for days, with the S&P 500 surging 7.3% last week.
Biden’s election, together with the likelihood that the Senate will remain in GOP control, could mean a new era of divided government, something the market has traditionally liked.
The final make-up of the Senate hinges on two Georgia runoffs scheduled for January.