Stock Market Today: Stocks Start Another Week With a Vaccine Bump 

Equities rallied Monday after data showed high efficacy for an AstraZeneca (AZN) vaccine that could be more easily distributed than its peers.

3D modeled art of a bull, signifying a bull market
(Image credit: Getty Images)

The "rotation" trade returned once more after the market was greeted with COVID vaccine news for a third consecutive Monday.

The heroes today were AstraZeneca (AZN (opens in new tab), -1.1%) and the University of Oxford, whose trial vaccine is far easier to store than other vaccines, which could make it easier to distribute across the globe. Trial data revealed an average efficacy of about 70% against COVID – lower than competitors Pfizer (PFE (opens in new tab))/BioNTech (BNTX (opens in new tab)) and Moderna (MRNA (opens in new tab)), hence AZN's down day – but adjusting dosages could get efficacy up to 90%.

The news prompted a massive spike in cyclical sectors such as financial stocks, up 1.9% as a sector, as well as energy plays such as Exxon Mobil (XOM (opens in new tab), +6.6%) and Chevron (CVX (opens in new tab), +6.1%) as U.S. crude oil futures climbed 1.5% to $43.06 per barrel. Stocks also enjoyed a bump after learning that President-elect Joe Biden may nominate former Fed chair Janet Yellen as his Treasury Secretary.

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The Dow Jones Industrial Average jumped 1.1% to 29,591, while the Nasdaq Composite gained a more subdued 0.2% to 11,880.

Other action in the stock market today:

  • The small-cap Russell 2000 closed at another record high, up 1.9% to 1,818.
  • The S&P 500 improved by 0.6% to S&P 500.
  • Gold futures dropped 1.8% to settle at $1,837 per ounce.

Could 2020 Finish Like It Started?

Wall Street is increasingly warming to the idea that the market could rally into the new year.

"The impending roll-out of multiple highly effective COVID vaccines and the Fed's commitment to backstopping the economy give me confidence that stocks will trade higher into year-end and beyond," says Marc Chaikin, founder of quantitative investment research firm Chaikin Analytics. "I don’t believe that caution is in order and view sideways to downward price action as a buying opportunity.

"The broadening out of the advance to include small cap, value and cyclical stocks, should be accompanied by a robust year-end rally."

If you're looking to leverage value, you can do so either through individual stocks or diversified funds, while these small-cap stocks could make hay as well. The pros also expect further gains for so-called Biden stocks as challenges to his presidential victory thin away.

Another source of gains could come from an unlikely area of the market: consumer staples stocks.

The conventional wisdom goes that staples will be in for a difficult 2021 as vaccines dampen the COVID threat and Americans emerge from their houses. But some staples plays benefit just as much if not more from an outgoing American consumer, and a few others have additional edges on their side as we head into 2021. Read on as we look at some of the best consumer staples stocks for 2021.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.