By Geoffrey Smith
Investing.com -- U.S. stock markets opened sharply higher on Monday, as encouraging newsflow over the weekend on the hunt for a vaccine to treat the Covid-19 virus helped to restore confidence in the ability of the market to bounce from last week's setback.
By 10:10 AM ET (1410 GMT), the Dow Jones Industrial Average was up 335 points, or 1.2% at 28,001 points, while the S&P 500 was up 1.6% and the Nasdaq Composite was up 2.2%. The corrections in both of the latter indexes had stopped on Friday more or less in line with their respective 50-day moving averages, a development that leaves them well placed to rebound this week, according to some technical analysts.
Last week had been the worst since March for the major boards, but the weekend brought some relief, as Pfizer (NYSE:PFE) CEO Albert Bourla told CBS that the company's vaccine could be ready for distribution within the U.S. by the end of the year. Pfizer stock was up 1.3%, while the stock of its partner in Covid vaccine development, German-based Biontech (NASDAQ:BNTX), was up 4.8%.
The market was also supported by the news of some big acquisitions over the weekend, with chipmaker Nvidia (NASDAQ:NVDA)'s stock rising 8.1% on the back of its $40 billion cash-and-stock acquisition of U.K. chip designer ARM from Softbank (OTC:SFTBY), and Immunomedics (NASDAQ:IMMU) stock more than doubling after Gilead Sciences (NASDAQ:GILD) offered to pay $21 billion for the biotech company.
The Nvidia acquisition would transform it into a global leader in chipset design. For that reason, the Chinese-based Global Times argued on Monday that Beijing could be inclined to refuse antitrust clearance, fearing that Huawei would no longer have access to ARM's designs.
More positively for broader market sentiment, the dispute over Chinese video-streaming service TikTok appears to be nearing a resolution, after Oracle (NYSE:ORCL) confirmed it had been chosen by TikTok's owner ByteDance to be the service's 'trusted technology partner' in the U.S., edging out Microsoft (NASDAQ:MSFT) and Walmart (NYSE:WMT). Oracle stock rose 4.8%, while Microsoft stock rose 1.7%.
Among the losers were - once again - oil and gas stocks, as crude prices extended last week's decline in response to a gloomier forecast from the Organization of Petroleum Exporting Countries. OPEC's monthly oil market report revised down its forecast for global oil demand to by an average of 400,000 barrels a day to 90.2 million b/d, and also warned that it expects the weakness in Asian demand to last through the first half of 2021. Even more alarmingly. U.K. oil major updated its long-term forecasts to reflect its assumption that global oil demand will peak much earlier than previously reckoned. BP (NYSE:BP)'s latest energy outlook assumes global demand will plateau by the middle of the current decade before going into long-term decline as alternative energy sources displace it.
Exxon Mobil (NYSE:XOM) stock fell 0.4% while Occidental Petroleum (NYSE:OXY) stock fell 2.2%.