US STOCKS-S&P 500 hits 10-week high on vaccine hopes and stimulus promise

(For a live blog on the U.S. stock market, click LIVE/ or
type LIVE/ in a news window.)
* Delta Air Lines to resume flying major routes in June
* S&P 500 eyes best day in nearly 6 weeks
* Cyclicals lead gains among major S&P sectors
* Dow up 3.91%, S&P 500 up 3.36%, Nasdaq up 2.50%

(Updates to mid-afternoon, changes byline)
By Chuck Mikolajczak
NEW YORK, May 18 (Reuters) - U.S. stocks jumped on Monday,
and the S&P 500 reached 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 26.15% 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.
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 up at least 14%.
Airlines also soared, with the NYSE Arca airline index
.XAL climbing 12.7%. Delta Air Lines DAL.N on Monday said it
would resume flying several major routes in June. "The reopening stuff is all working and the stay-at-home
stuff is not working," said Thomas Martin, senior portfolio
manager at Globalt Investments in Atlanta.
"What we are seeing here is we have recovered to a level
where we know there is some resistance, we know it is sort of a
tussle between hope and fear, and you are going to get this sort
of moving amongst the different kinds of stocks," said Martin.
The Dow Jones Industrial Average .DJI rose 926.35 points,
or 3.91%, to 24,611.77, the S&P 500 .SPX gained 96.16 points,
or 3.36%, to 2,959.86 and the Nasdaq Composite .IXIC added
225.59 points, or 2.5%, to 9,240.15.
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. The benchmark S&P 500 was on track for its biggest one-day
percentage gain in nearly six weeks, with all 11 major S&P
sectors higher.
Cyclical plays were in favor with the energy .SPNY and
materials .SPLRCM sectors climbing 7.5% and 4.8%,
respectively, as a gradual recovery in economic activity pointed
to more demand for oil and industrial materials. Still, stocks that are poised to benefit the most from a
restart of the economy continue to lag those that have surged
from the restrictions. 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 rose 9.99% and Ford Motor Co F.N
7.86% as 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. Advancing issues outnumbered declining ones on the NYSE by a
7.93-to-1 ratio; on Nasdaq, a 4.62-to-1 ratio favored advancers.
The S&P 500 posted 22 new 52-week highs and no new lows; the
Nasdaq Composite recorded 88 new highs and seven new lows.