Dow Jones futures fell modestly late Monday along with S&P 500 futures and Nasdaq futures, after coronavirus vaccine news triggered a wild, uneven stock market rally Monday. The Dow Jones and S&P 500 index jumped to a record high after Pfizer (PFE) and BioNTech (BNTX) jointly announced that their Covid-19 vaccine candidate was more than 90% effective. But the Dow and S&P closed well off highs while the Nasdaq reversed significantly lower.
Boeing (BA), airlines, travel and many retail and financial stocks hard hit by the coronavirus pandemic were big winners Monday. Stay-at-home plays such as Zoom Video (ZM), Peloton (PTON), Yeti (YETI) and Etsy (ETSY) were among the big losers, though many other growth names also came under pressure.
After the close, Beyond Meat (BYND) reported a surprise loss on much-weaker-than-expected sales amid restaurant and food service woes. Beyond Meat stock, which already had round-tripped a double-digit gain and fallen below its 50-day line, is down 22% overnight. That would be a six-month low. Beyond Meat also did not offer guidance.
Coronavirus Crisis Isn’t Over
U.S. Stock Market Today Overview
Last Update: 4:08 PM ET 11/9/2020
Just because a Pfizer coronavirus vaccine may be on its way doesn’t mean that the crisis is over. Widespread coronavirus vaccinations are months away. Right now, coronavirus cases in the U.S. and worldwide are soaring. More and more European countries are imposing partial lockdowns. In the U.S., local officials are starting to mull new restrictions.
So the coronavirus plays like Zoom and Peloton may fall in and out of favor over the next few weeks and months, along with coronavirus vaccine plays like Boeing and Marriott (MAR).
What should investors do? Look for companies and stocks that did well before the coronavirus and fared well during the pandemic, but didn’t necessarily get an extra boost from the crisis. These are all positioned to do well in the next year.
Apple (AAPL), Microsoft, Nvidia, Salesforce and ServiceNow stock all seem likely candidates. Better still, Apple, Microsoft, Nvidia and Salesforce stock are near buy points. All but Apple stock were above official buy points intraday Monday before falling back, while all four have already triggered early entries. As for ServiceNow, shares all holding just above their old buy point and 50-day line.
Given that we’re discussing stocks that can fare well amid a coronavirus crisis and with a Covid-19 vaccine in play, it should be no surprise that three are IBD Long-Term Leaders: software giants Microsoft stock, Salesforce and ServiceNow. Microsoft, ServiceNow and Nvidia stock are all on IBD Leaderboard. Microsoft stock also is on SwingTrader. ServiceNow stock and Nvidia are on the IBD 50.
Dow Jones Futures Today
Dow Jones futures fell 0.55% vs. fair value. S&P 500 futures sank 0.5%. Nasdaq 100 futures retreated 0.4%.
Dow Jones futures showed solid gains early Monday morning, then abruptly spiked on the Pfizer coronavirus vaccine news. Nasdaq futures, which had been leading the overnight charge, wavered between gains and losses, foreshadowing tech stocks’ struggles in the regular session.
Coronavirus cases worldwide reached 51.23 million. Covid-19 deaths topped 1.26 million.
Coronavirus cases in the U.S. have hit 10.42 million, with deaths above 244,000. The U.S. has topped 100,000 new Covid-19 cases for a sixth straight day.
The Pfizer coronavirus vaccine, codeveloped with BioNTech, now must reach certain safety milestones. But the Pfizer/BioNTech vaccine may reach the FDA for emergency approval after the third week of November. The late-trial progress for the mRNA-based Pfizer vaccine is good news for the Moderna (MRNA) Covid-19 vaccine candidate. As its ticker implies, Moderna also is relying on mRNA technology for its coronavirus vaccine. Efficacy data for Moderna’s vaccine could come in December, with AstraZeneca (AZN) due before year-end.
Meanwhile, Eli Lilly (LLY) won emergency use authorization from the FDA for bamlanivimab, to treat mild to moderate Covid-19 in adults and children. Lilly stock rose modestly overnight.
Stock Market Rally Monday
The Dow Jones Industrial Average rose 2.95% in Monday’s stock market trading, but closed near session lows, giving up nearly half its big intraday gains. The S&P 500 index pared its huge gain to just 1.2%. The Nasdaq composite reversed lower for a 1.5% slide.
Growth stocks fared well. However, among the best ETFs, the Innovator IBD 50 ETF (FFTY) plunged 6.6%. The iShares Expanded Tech-Software Sector ETF (IGV) lost 3.6%, with Microsoft, Salesforce and ServiceNow stock all major components. The VanEck Vectors Semiconductor ETF (SMH) dipped just 1.2% despite Nvidia’s big losses, and some chipmakers and several chip-equipment stocks rallied.
Monday’s action could be a turning point for the stock market rally. After spending most of 2020 amid the coronavirus pandemic, a full economy seems plausible. But if there’s light at the end of the tunnel, it’s far in the distance.
With coronavirus cases and hospitalizations soaring in the U.S., Europe and much of the world outside East Asia, increased social distancing and new business and government restrictions could chill the economy. The revival of real economy stocks may be on hold, or choppy, during several tough months. Likewise, true coronavirus plays may quickly rebound, especially those such as Zoom Video that seem to have long-term potential beyond the pandemic.
A one-day shift is not a sector rotation.
Stocks For Coronavirus Vaccine Or Pandemic
That’s why investors should consider including some quality companies and stocks in your portfolio that are likely to do well when the coronavirus pandemic or Covid vaccine news are driving the market action. Salesforce stock gave up solid gains, but just lost 0.3%. Apple and Microsoft stock fell about 2%. ServiceNow and Nvidia stock both retreated more than 6%. But none of these stock charts looks especially damaged. All are holding above their 50-day moving averages.
Nvidia earnings are next week, but Apple, Microsoft and ServiceNow have already reported while Salesforce earnings are in three weeks.
Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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