Wall Street set for higher open on J&J vaccine cheer, stimulus optimism

Wall Street | File photo

Wall Street's major averages were set to open sharply higher on Monday as bond markets calmed after a month-long selloff, while encouraging updates on the vaccine and stimulus fronts strengthened bets over a swift economic recovery.

Shares of cruise liner and hotel operators, and carriers including Carnival Corp, Hilton, Delta Air Lines Inc and American Airlines gained between 1.8% and 4.6% premarket.

Johnson & Johnson rose 1.8% as it began shipping its single-dose shot vaccine after it became the third authorized COVID-19 vaccine in the United States over the weekend.

President Joe Biden scored his first legislative win as the House of Representatives passed his $1.9 trillion coronavirus relief package early Saturday. The bill now moves to the Senate.

U.S. bond yields eased on Monday after a swift rise last month on expectations of accelerated inflation due to bets on an economic rebound. The U.S. 10-year treasury yield eased to 1.446% after hitting a one-year high of 1.614%.

"The angst over rising yields is going to subside with yield levels clearly calming down while positive vaccine and stimulus updates will also support (markets) as it's very good news for the economy and corporate earnings," said Art Hogan, chief market strategist at National Securities in New York.

Sectors that stand to benefit more from an economic rebound outperformed, with lenders Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co jumping between 1.3% and 2.2%, and energy firms Chevron Corp and Exxon Mobil Corp between 1.8% and 2.6%.

Wall Street's main indexes ended lower last week, with the Nasdaq suffering its worst week in four months, as a rise in long-dormant yields signaled bonds are more serious investment competition, sparking a pullback in high-valuation tech stocks.

Apple, Microsoft Corp, Facebook Inc and Amazon.com Inc rebounded between 1% and 1.9% on Monday.

At 8:12 a.m. ET, Dow E-minis were up 333 points, or 1.08% and S&P 500 E-minis were up 43.25 points, or 1.14%. Nasdaq 100 E-minis were up 167.25 points, or 1.3%.

Later in the day, investors will look to ISM's U.S. manufacturing activity data for February which is expected to be largely unchanged from January.

Warren Buffett's enthusiasm for the future of America and his company Berkshire Hathaway Inc has not been dimmed by the coronavirus pandemic, according to his annual letter to investors. Berkshire's shares rose about 2.3%.

Perrigo Company Plc jumped about 9% as the consumer healthcare products company said it would sell its underperforming generic drugs business for $1.55 billion.


(Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel