European stocks and Dow futures jump on vaccine news, recovery hopes

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EUROPE MARKETS

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Up 5% last week after early data from U.S. drugmaker Pfizer and German partner BioNTech’s coronavirus vaccine showed it was 90% effective, the Stoxx Europe 600 surged 1.4%, after Moderna said its coronavirus vaccine candidate was more than 94% effective.

Futures on the Dow Jones Industrial Average rose 513 points.

The French CAC 40 German DAX and U.K. FTSE 100 extended gains after the Moderna news. Hard-hit European companies such as cruise operator Carnival and International Airlines Group jumped.

The recovery in the world’s number-two economy seems to be accelerating, with China’s industrial production jumping 6.9% in the 12 months to October and retail sales rising 4.3%. Japan’s third-quarter gross domestic product rose a stronger-than-forecast 5% in the third quarter. China and Japan also were among the signatories to the Regional Comprehensive Economic Partnership, a free-trade pact covering 15 key Asian countries apart from India.

U.S. hospitalizations for COVID-19 reached a record high on Sunday, according to data from the COVID-19 project, as various regional restrictions begin to kick in. U.K. Prime Minister Boris Johnson, who has suffered from COVID-19 before, is now self-isolating after meeting a member of parliament who contracted the virus, though he is not reported to be showing any symptoms. News that the Biden administration didn’t endorse a national lockdown proved supportive for stocks.

It is also a critical week for negotiations between the U.K. and European Union on a trade deal, as current terms expire at the end of the year.

BBVA soared 19% after agreeing to sell its U.S. operations to PNC Financial Services for $11.6 billion. BBVA said PNC paid more than what any of the analysts covering the Spanish bank valued its U.S. operations.

The news sent Banco Sabadell up 20%, as it helped to rekindle previous speculation BBVA could buy it. Banco Santander rose 5%.

Vodafone Group rose 3%, as the mobile-phone operator reported a 1.9% decline in its half-year adjusted earnings before interest, depreciation and amortization, on a 2.3% drop in revenue. Vodafone maintained its dividend and reiterated its free cash flow and Ebitda guidance.

Unibail-Rodamco-Westfield shares jumped 17%, after replacing its chairman with a director who was critical of the commercial-real-estate company’s strategic plans. A capital-raising plan was rejected by shareholders last week.

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