UPDATE: Dow ends 327 point higher after Janet Yellen reported as Biden's Treasury Secretary pick
Mark DeCambre, and Joy Wiltermuth
Wall Street knows Yellen as a steady hand, helping guide U.S. economy through last crisis
U.S. stock indexes closed near session highs Monday, following reports that President-elect Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen to become the next Treasury Secretary.
Equity indexes already saw modest gains earlier in the seession following upbeat developments on the coronavirus vaccine and treatment fronts.
Markets will be closed on Thursday for Thanksgiving and volumes throughout the week are likely to be thinner than usual.
On Friday (https://www.marketwatch.com/story/stock-index-futures-mixed-as-covid-restrictions-threaten-recovery-11605875477?mod=market-snapshot), stock indexes finished the week mostly lower:
Stocks ended near session highs Monday, following reports from the Wall Street Journal (https://www.wsj.com/articles/janet-yellen-is-bidens-pick-for-treasury-secretary-11606161637?page=1) and other major news outlet (https://www.nytimes.com/2020/11/23/business/economy/janet-yellen-treasury-secretary.html)s that President-elect Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen to become the next Treasury Secretary.
If confirmed, Yellen would be the first woman to hold the job, but also would be a familiar figure for Wall Street, following her four-year tenure as the head of the Federal Reserve begining in 2014, during the Obama administration and in the aftermath of the 2008 global financial crisis.
Yellen was replaced by current Fed Chairman Jerome Powell in 2018, who largely followed in Yellen's dovish footsteps by keeping rates low for much of the past decade and by tapping the central bank's balance sheet when needed to ensure the flow of credit in the financial system during periods of stress.
Stocks already were edged higher earlier in the session, following updates on experimental therapies and prophylactics for COVID-19, which helped lift shares of hard-hit companies, even as hospitalizations for the deadly disease entering a dangerous phase as the holiday period gets under way.
The University of Oxford and AstraZeneca(AZN.LN) said their vaccine was found to have as much as a 90% efficacy rate (https://www.marketwatch.com/story/astrazeneca-study-finds-its-covid-19-vaccine-effective-with-one-regimen-showing-90-efficacy-2020-11-23) in preventing infections without serious side effects in a large trial.
Read: What to expect after the Oxford-AstraZeneca COVID-19 vaccine news (https://www.marketwatch.com/story/what-to-expect-after-the-oxford-astrazeneca-covid-19-vaccine-news-11606141395?mod=mw_latestnews)
The report comes amid a series of weekly updates on vaccines and treatments that appear to be forming a bulwark against the pathogen that has taken more than 250,000 lives in the U.S. and infected 12 million globally (https://www.marketwatch.com/story/us-coronavirus-case-tally-tops-12-million-amid-growing-fears-that-thanksgiving-travel-will-spark-another-surge-of-infections-2020-11-23?mod=newsviewer_click).
Over the weekend (https://www.marketwatch.com/story/regeneron-antibody-cocktail-wins-emergency-use-authorization-from-fda-01606056894?mod=mw_quote_news), U.S. health officials agreed to allow emergency use of a second antibody drug to help the immune system fight COVID-19, an experimental medicine used to treat President Donald Trump when he was sickened by the virus earlier this year.
"We've had several Mondays in a row with vaccine updates," said Sahak Manuelian, head of equity trading at Wedbush Securities, which he sees as bolstering the appeal of hard-hit companies and industries by the pandemic. "Markets are getting pretty excited about that, and it's taking some of the headwinds out of 2021."
Recently, Pfizer Inc. (PFE) filed for approval from U.S. regulators for emergency use of the vaccine it's developed with BioNTech SE (BNTX) that had a 95% efficacy rate in a clinical trial, while Moderna Inc. (MRNA) earlier this month said its vaccine candidate had a 94% efficacy rate in a trial.
Wall Street is hoping that successful vaccines and therapeutics can help bring the coronavirus under control soon, even as a spike in cases and hospitalizations takes hold here and elsewhere in the world.
Indeed, the U.S. reported 142,732 new cases (https://www.wsj.com/livecoverage/covid-2020-11-23?mod=hp_lead_pos6) of the disease caused by the novel strain of coronavirus on Sunday and registered a record number of hospitalizations for the 13th straight day.
Nearly 84,000 people were hospitalized with the disease as of Sunday, according to the Covid Tracking Project (https://covidtracking.com/data/national).
"One of our themes, as this year concludes and as investors begin to think of 2021, is a barbelling of the cyclical, value sectors with the secular growth-theme," said Michael Arone, chief investment strategist at State Street Global Advisors, in an interview.
"In my view, it's not about value or growth. It's about value and growth."
However, caution about how quickly experimental drugs or vaccines can be distributed could create some headwinds for bullish investors.
"Despite the encouraging medical news flow, logistical challenges remain and it's not yet clear how quickly vaccine programs can be deployed to allow restrictions on activity to be eased, especially at a global level," wrote Ben May, director of global macro research at Oxford Economics.
"In addition, it's likely that the economic situation will get worse before it gets better," he said in a Monday note, pointing to tightened restrictions in some U.S. states and in Europe.
Back on the political front, President-elect Joe Biden also intends to nominate Antony Blinken to serve as secretary of state, according to reports (https://www.wsj.com/articles/joe-biden-picks-antony-blinken-for-secretary-of-state-11606100542). That move comes even as Trump continued efforts to contest (https://www.wsj.com/articles/trump-continues-to-challenge-election-results-as-legal-options-dwindle-11606066065?mod=hp_lead_pos3) the outcome of the Nov. 3 election, as his legal options narrowed (https://www.wsj.com/articles/trumps-legal-path-to-challenge-election-is-closing-11606074745?mod=article_inline).
In economic news, the Chicago Fed national activity index (https://www.marketwatch.com/story/chicago-feds-national-activity-index-points-to-stronger-growth-in-october-11606139590?mod=mw_latestnews)rose to 0.83 in October from revised 0.32 in prior month, indicating some improvement in business activity.
Separately, purchasing managers survey data from IHS Market showed a rise in the services index to 57.7 from 56.9 from the previous month and a rise in manufacturing to 56.7 from 53.4 in November. A reading of 50 or better indicates expanding activity.
The pan-European Stoxx 600 index closed 0.2% lower, while the U.K.'s FTSE 100 index ended down 0.3% Monday.
In Asian markets, China's Shanghai Composite Index closed 0.5% higher, the CSI 300 finished up 1.3%, while Hong Kong's Hang Seng booked a 0.1% loss. Japan's Nikkei 225 was closed due to a holiday.
The yield on the 10-year Treasury note (https://www.marketwatch.com/story/treasury-rates-head-higher-amid-covid-vaccine-treatment-updates-11606139848?mod=bond-report) rose 2.9 basis points to around 0.857%. Yields and prices move in opposite directions.
The ICE U.S. Dollar Index , a gauge of the greenback's strength against its major rivals, was 0.2% higher.
Crude-oil futures (https://www.marketwatch.com/story/oil-prices-rise-remain-buoyed-by-vaccine-progress-11606138242?mod=futures-movers) rose 1.5% to settle at $43.06 a barrel, the highest close for a front-month contract since Aug. 26, according to Dow Jones Market Data. Meanwhile, gold futures (https://www.marketwatch.com/story/gold-prices-retreat-as-vaccine-progress-hurts-metals-appeal-11606135659) fell 1.8%, to settle at $1,837.80 an ounce, the biggest daily drop since early November.
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-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
November 23, 2020 16:30 ET (21:30 GMT)
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