By Caitlin Ostroff and Chong Koh Ping

U.S. stocks jumped to fresh records Monday after progress on a Covid-19 vaccine and Democrat Joe Biden's electoral victory ushered in a sea change in financial markets, reordering winners and losers.

The Dow Jones Industrial Average climbed more than 1,000 points, or 3.7%, setting its first intraday record since February, before the pandemic shutdown began. The index came within about 70 points of the 30000 mark before paring some gains. The S&P 500 surged 2.7%, also putting it in record territory.

Markets rallied after a vaccine developed by Pfizer and partner BioNTech proved better than expected at protecting people from Covid-19 in a pivotal study, a milestone in the hunt for shots that can stop the global pandemic.

The vaccine jolted markets, at least temporarily, reviving the fortunes of the pandemic losers, such as travel companies, retailers and banks, whose stocks rise and fall with the outlook for the economy.

Shares of Carnival surged 31%, American Airlines Group gained 15%, Kohl's rose 11% and Bank of America climbed 10%.

Meanwhile, the pandemic's winning stocks, such as big tech companies, lagged behind the rest of the market. The tech-heavy Nasdaq Composite rose about 0.8%. Netflix slumped 5.1%, Clorox declined 6.2% and Zoom Video Communications dropped 14%.

The positive, though incomplete, results bring the vaccine a big step closer to being cleared for widespread use. Pfizer said it is on track to ask health regulators for permission to sell the shot before the end of this month, if pending data indicate the vaccine is safe. Pfizer shares jumped 7.9%.

The news rippled through other markets as well. The yield on the 10-year Treasury note jumped to 0.956%, from 0.821% Friday. Brent crude oil rose more than 8%.

The vaccine news caught other parts of the markets off guard, with sharp, sudden moves in even the most liquid assets. The Japanese yen slid 2% against the dollar to 105.43. Gold fell 4.9% to $1,856 a troy ounce.

The small-cap Russell 2000 index jumped 5.5%. Earlier, futures tied to the index rose 7%, hitting CME Group's limit up, which prevents them from rising further.

The moves suggested investors were instantly recalibrating their forecasts for faster economic growth and higher inflation based on the vaccine news, as a successful vaccine has the potential to restart swaths of the economy hobbled by the pandemic.

"There are a lot of things that are benefiting from people willing to take risk and rotate into the unloved, so to speak," said Brian Andrew, chief investment officer at Johnson Financial Group. He said his firm has increased clients' exposure to stocks in recent weeks, particularly strategies that invest in cyclical companies like financials.

A reopening of the economy would also weaken the advantage that tech companies, which thrive on virtual experiences and a lack of social contact, have enjoyed during the pandemic.

"We all sort of knew that November would be a pretty important period for last stage news on the three main vaccines. The news is clearly pretty positive," said James McCormick, a strategist at NatWest Markets. "We've got the election past us and now the market is focusing on what's next."

The new leg of the rally in stocks also reflects the reduced uncertainty surrounding the U.S. elections, combined with expectations that a Democrat-controlled White House and divided Congress could result in moderate policy measures on taxes and spending.

"The market-friendly bits of Biden will be in place: the lack of volatility, more clear foreign policy," said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. "But at the same time, the bits that the market was worried about -- higher taxes and more regulation -- will not happen. That's what's been driving the market higher."

The pan-continental Stoxx Europe 600 jumped 3.9%. Regional markets in Asia also rallied, with benchmarks in Japan, South Korea, India and Taiwan hitting multiyear or record highs.

Overseas investors expect that an administration led by President-elect Joe Biden will engage in more predictable foreign policy and may be less inclined to levy tariffs or unexpectedly escalate tensions with China, Mr. McCormick, said. "Equities outside of the U.S. get a nice lift from this," he said.

Asia is likely to benefit as higher trade tariffs become less likely, according to Tai Hui, chief market strategist for the region at J.P. Morgan Asset Management. "A lot of the shocks we've experienced in the past three years will be less of a concern. And investors will welcome that," he said.

China's Shanghai Composite Index closed 1.9% higher, and Hong Kong's Hang Seng Index rose 1.2%.

"The consensus is that Biden will be easier on trade and foreign policy, unlike Trump who is more erratic and aggressive," said Colin Low, senior macro analyst at FSMOne.com in Singapore.

Japan's Nikkei 225 gained 2.1% to close at a fresh 29-year high.

"Globally, investors are just happy to turn the page on the U.S. elections," said Eli Lee, head of investment strategy at Bank of Singapore. Mr. Lee said the feared scenario of a drawn-out contested election had diminished, reducing uncertainty for markets and for policy makers such as the Federal Reserve.

"The Fed has been on the back foot for the past couple of months as it wants clarity on what policies would be on the fiscal front to craft monetary policies to support the economic recovery," he said.

--Ben Eisen and Xie Yu contributed to this article.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Chong Koh Ping at chong.kohping@wsj.com

(END) Dow Jones Newswires

11-09-20 1142ET