By Joe Wallace
U.S. stock futures rose Monday, putting Wall Street on track to open the week on the front foot after promising results on a Covid-19 vaccine bolstered hopes for an economic rebound in 2021.
Futures tied to the S&P 500 climbed 0.6%, after the benchmark stocks gauge snapped a two-week winning streak on Friday. Nasdaq-100 futures also gained 0.4%, while Dow Jones Industrial Average futures advanced 0.7%.
The University of Oxford and AstraZeneca said their vaccine was found to be as much as 90% effective in preventing infections without serious side effects in a large trial. The results added to optimism among investors that the deployment of effective vaccines can help bring coronavirus under control next year, allowing beaten-down sectors of the economy to recover.
"When you look into the details, it looks like very good news," said Paul O'Connor, head of multi asset at Janus Henderson Investors. Unlike shots under development from Pfizer and Moderna, AstraZeneca's vaccine can be stored at temperatures above zero degrees Celsius, easing the distribution process, Mr. O'Connor said.
Pfizer and partner BioNTech on Friday asked the U.S. Food and Drug Administration to clear the companies' Covid-19 vaccine, and said that distribution could potentially begin mid-December.
AstraZeneca's results bode well for the availability of a third Western-developed coronavirus vaccine, giving a boost to stocks whose fortunes are closely tied to those of the economy.
Shares in economically-sensitive energy and material producers, travel-and-leisure companies and banks were among the best performers in Europe. The Stoxx Europe 600 rose 0.4%.
"There's a growing prospect of a significant normalization of economic activity in the second half of next year," said Mr. O'Connor. Still, he added that much of the vaccine optimism was already baked into stock prices, and thinks the current surge of coronavirus is likely to weigh on economic growth in the U.S. in the coming months.
Investors will get an early look at how the wave of infections is affecting the manufacturing and services sectors when surveys of purchasing managers are released at 9:45 a.m. ET. The preliminary data for November are expected to show that activity in the services sector continued to grow, but at a slower pace than last month.
The U.S. reported 142,732 new cases of coronavirus Sunday and registered a record number of hospitalizations for the 13th straight day. Reported case counts are generally lower over the weekend, and the country's rolling seven-day average continues to climb.
New York Gov. Andrew Cuomo warned that coronavirus cases are rising so quickly in parts of Staten Island that the New York City borough may see the closure of nonessential businesses and a ban on mass gatherings.
In Europe, where authorities have taken a more stringent approach to stemming the second wave of coronavirus, restrictions are already taking their toll on economy. Business activity has fallen so far this month, surveys of purchasing managers by IHS Markit showed Monday, with a particularly steep decline in France.
In government bonds, the yield on 10-year Treasury notes ticked up to 0.852%, from 0.828% Friday. Yields rise when bond prices fall. The WSJ Dollar Index, which tracks the U.S. currency against a basket of others, ticked down 0.2%, extending the greenback's recent downtrend.
Asian markets broadly climbed, with China's Shanghai Composite Index ending 1.1% higher. South Korea's Kospi advanced 1.9% after government data showed exports rose 11% in the first 20 days of November, a boost for the trade-reliant economy.
Stocks in Asia are among the top picks for Bjoern Jesch, global head of multiasset and solutions at German fund manager DWS, as he seeks to shift some money from U.S. markets to capitalize on a pickup in the world economy. "They have been able to manage the crisis a lot better than Europe and the U.S.," he said of China and other Asian countries.
Commodities also received a lift from the AstraZeneca vaccine news, pushing Brent-crude oil futures up 1.8% to $45.74 a barrel and putting the international energy benchmark on track for its highest settlement since late August.
Write to Joe Wallace at Joe.Wallace@wsj.com
(END) Dow Jones Newswires
11-23-20 0548ET
