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Market Snapshot: Dow claws back 28,000 perch as stocks rebound from last week’s selloff, amid vaccine hopes, deal-making

Market Snapshot

Oracle said to beat Microsoft to forge strategic partnership with U.S. operations of TikTok

AFP/Getty Images

U.S. stocks rose Monday, taking back a chunk of last week’s losses amid fresh hope for a coronavirus vaccine and a flurry of potential corporate mash ups announced over the weekend, 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

rose 384 points, or 1.4%, to 28,049. The S&P 500

added 54 points, or 1.6%, to 3,395. The Nasdaq Composite

climbed 216 points, or 2%, to 11,070.

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 took on a buoyant tone at the start of the week as investors drew optimism from progress reported on the COVID-19 front, after market turbulence last week led the Nasdaq Composite to post its steepest weekly decline since the height of the pandemic-driven selloff in March.

“The market is moving up on several deals along with renewed hopes of a vaccine as AstraZeneca restarts trials and Pfizer’s CEO suggest a vaccine may be ready by year-end,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a Monday research note.

Notably, reports that the AstraZeneca PLC

 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

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 taken away by the prospects of a coronavirus vaccine, as it remains unclear how swiftly a successful vaccine candidate could be produced in mass quantities and handed out to the broader public.

“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.

A flourish of deal activity also was being digested as shares of Oracle Corp.

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 with the matter. Such a deal would see Oracle beat Microsoft Corp., 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.

was seen nearing a deal to buy British chip-designer Arm Holdings for more than $40 billion from SoftBank Group Corp. and drugmaker Gilead Sciences

 struck a deal to acquire Immunomedics

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

Which stocks are in focus?
  • Shares of Seattle Genetics

    rallied 10.2% on Monday after it announced two cancer-drug-related deals with Merck & Co. Inc.

  • Vaxart Inc.’s stock

    jumped 16.1% 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.

     announced Monday an agreement to buy mobile provider Tracfone from America Movil

    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.

    shares were up 4.7% 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.

    will pay $21 billion to buy biotech Immunomedics Inc. and its breast-cancer drug. Gilead’s shares gained 3.4%.

  • Tempur Sealy International Inc.

    shares soared 8.6% after the mattress maker announced that it expects a 30% year-over-year increase in net sales in the third quarter

Which markets are on the move?

The 10-year Treasury note yield

was down 1 basis point to 0.66%. Bond prices move inversely to yields.

Gold futures

on the New York Mercantile Exchange were up 1.2% to $1,971 an ounce. Meanwhile, U.S. crude futures

were down 0.4% to $37.18 a barrel.

In global equities, the Stoxx Europe 600 index

rose 0.2% and the U.K.’s FTSE 100

ended with a 0.1% loss. Japan’s Nikkei

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

gained 0.5%.

The ICE U.S. Dollar Index
a measure of the greenback’s strength against its major rivals, weakened 0.4%.

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