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* Delta Air Lines to resume flying major routes in June
* S&P 500 notches best day in nearly 6 weeks
* Cyclicals lead gains among major S&P sectors
(Updates to market close)
By Chuck Mikolajczak
NEW YORK, May 18 (Reuters) - U.S. stocks jumped on Monday,
and the S&P 500 closed at a 10-week high, on encouraging
early-stage data for a potential coronavirus vaccine and on the
promise of more stimulus to lift an economy beaten down by the
pandemic.
Drugmaker Moderna Inc MRNA.O surged after the company said
its experimental COVID-19 vaccine showed promising results in a
small early-stage trial. After surging more than 32% from a multi-year low hit in
March, the S&P 500 had been trading in a tight range in May as
investors weighed the hopes of an economic recovery against the
fears of another wave of infection as states lifted virus-led
restrictions.
"The fact that Moderna came out with the Phase 1 trial that
seems to be positive, that certainly is igniting the storm,"
said Ken Polcari, chief market strategist at SlateStone Wealth
LLC in Jupiter, Florida. "That will ignite the storm because if
there is a vaccine then all this uncertainty about the economy
and the virus goes away."
Stocks that have been particularly battered by government
lockdown measures implemented to stem the spread of the
coronavirus surged on Monday.
Travel-related stocks were among the biggest gainers, with
cruise line operators Carnival Corp CCL.N , Royal Caribbean
Cruises Ltd RCL.N and Norwegian Cruise Line Holdings Ltd
NCLH.N all outperforming the broader market. Airline stocks
also soared as Delta Air Lines DAL.N said it would resume
flying several major routes in June. Unofficially, the Dow Jones Industrial Average .DJI rose
911.95 points, or 3.85%, to 24,597.37, the S&P 500 .SPX gained
90.21 points, or 3.15%, to 2,953.91, and the Nasdaq Composite
.IXIC added 220.27 points, or 2.44%, to 9,234.83.
Markets also took heart from comments by Federal Reserve
Chair Jerome Powell over the weekend forecasting a gradual
economic recovery and his affirmation that more monetary
stimulus would be on the way if required. Powell is set to speak
before the Senate Banking Committee on Tuesday to discuss how
economic rescue efforts are working. Cyclical plays were in favor with the energy .SPNY and
industrial .SPLRCI sectors climbing as a gradual recovery in
economic activity pointed to more demand for oil and
manufactured products. Still, stocks that are poised to benefit the most from a
restart of the economy continue to lag those whose businesses
have weathered the restrictions or even grown as a result of the
lockdowns. The S&P 500 growth index .IGX has outperformed the
S&P value index .IVX by about 4 percentage points this month.
General Motors Co GM.N and Ford Motor Co F.N rose as
both started to reopen their North American factories in a push
to restart work in an industry that accounts for about 6% of
U.S. economic activity and employs nearly 1 million people in
the United States.