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TSX jumps following Pfizer vaccine news, Biden victory

The Toronto Stock Exchange ended Monday’s trading session up slightly more than 1 per cent, as Pfizer’s announcement of promising early test results of its COVID-19 vaccine and the election of Joe Biden to the U.S. presidency boosted markets around the world.

The S&P/TSX Composite Index (^GSPTSE) rose as much as 433 points on Monday, an increase of 2.66 per cent, the most in months, to more than 16,715. It closed the day up a more moderate 193 points, or 1.2 per cent, at 16,475.86.

Pfizer announced Monday that its COVID-19 vaccine was more than 90 per cent effective in preventing the virus, news that sent its stock – as well as global markets – skyrocketing.

Several companies in the travel and hospitality industries, among the hardest hit by impact of the COVID-19 pandemic, saw stocks surge on Monday.

Cineplex (CGX.TO) soared as much as 48.6 per cent to $7.95 amid hopes of a path towards an economic recovery. It closed at $7.05, an increase of nearly 32 per cent.

Air Canada (AC.TO), which reported third quarter results on Monday, jumped as much as 28.7 per cent to $20.36. It closed the day at $20.35, an increase of 28.6 per cent. Still, Air Canada’s chief executive Calin Rovinescu struck a cautious tone on a conference call with analysts on Monday about the vaccine news.

“I know the market has gotten out ahead of everybody this morning on what this vaccine means and the 90 per cent efficacy, etc.,” Rovinescu said.

“But basically, I would be cautiously optimistic and not assuming that it’s distributed instantaneously throughout the planet... I think a word of caution has to be brought to bear before we get ahead of our skis here.”

CAE (CAE.TO), a Canadian aviation training company, closed up 18.2 per cent, trading at $27.90.

At the same time, many companies that have seen stocks soar through the pandemic are down Monday. Lululemon (LULU), which acquired an at-home fitness company in the midst of COVID-19, closed down nearly 5 per cent. Shopify (SHOP) ended the day down nearly 14 per cent.

In the U.S., the S&P 500 jumped 3.6 per cent to more than 3,600, topping its previous record intraday high from September. The Nasdaq lagged as vaccine hopes pushed traders away from software stocks such as Zoom (ZM).

Traders have also welcomed the U.S. election results that, so far, point to a divided government. While there are two remaining Senate races to be decided in Georgia in January, the Republicans are largely expected to hold onto a majority in the Senate.

“A Biden divided government would bring significant changes in foreign policy and regulation – both in substance and tone. Yet the legislative agenda would be constrained, taking off the table the more transformative scenarios being contemplated ahead of the election,” BlackRock Investment Institute analysts wrote in a note to clients Monday. “The likely implication: continuity in the market environment.”

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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