Yesterdays “good news” press event from President Donald Trump started U.S. stocks on an upward trend this morning.
As of noon New York time, the Standard & Poor’s 500 was up 0.73% and the Dow Jones Industrial Average was ahead 0.99%. The NASDAQ Composite has higher by 0.51% and the Russell 2000 small cap index had gained 0.71%
On Sunday at his 5:30 p.m. event in Washington President Trump announced that the U.S. Food & Drug Administration had granted emergency approval for the use of convalescent plasma (that is giving blood plasma from someone who has recovered from the virus to treat the virus in another patient) as a coronavirus treatment. According to the FDA, “This product may be effective in treating COVID-19 and that the known and potential benefits of the product outweigh the known and potential risks of the product.”
Other medical organizations have been less than enthusiastic about the announcement with many pointing out that the benefits of the plasma treatment remain to be confirmed by clinical trials and a few even criticizing the FDA for moving ahead with the plasma approval since it will make it harder to track the course of the coronavirus antibodies in the general population.
In other market moving coronavirus vaccine news on Sunday the Financial Times reported that the U.S. Food and Drug Administration might grant an emergency use authorization in October to a vaccine for COVID-19 being developed by AstaZeneca (AZN) and Oxford University. The vaccine, AZD1222, is currently in a Phase 3 clinical trial that is now trying to enroll 30,000 people around the world in order to assess the safety and efficacy of the vaccine candidate. According to the Financial Times report, one plan being considered is for AstraZeneca to submit an application for emergency use authorization based on part of the Phase 3 study being conducted in the U.K., involving a subset of 10,000 people.
It would be very unusual for the FDA to grant an emergency use authorization based on non-U.S. data. And today AstraZeneca told Fortune that “AstraZeneca has not discussed emergency use authorization with the U.S. government and it would be premature to speculate on that possibility.”
The vaccine news or speculation has been enough to produce a strong rally in the shares of companies dependent on growth from a re-opened U.S. economy. As of noon, American Airlines (AAL), for example, was up 9.99% and amusement park operator Six Flags (SIX) had climbed 5.38%. MGM Resorts International (MGM) had gained 4.49%.
For today at least other sectors are outperforming technology shares. The Financial Select Sector SPDR ETF (XLF) was higher by 1.60% at noon while the Technology Select Sector SPDR ETF (XLK) was up only 0.88%.