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A face mask hanging on the fence of the New York Stock Exchange. Photo: Lev Radin/Pacific Press/LightRocket via Getty Images

The Dow closed up 2.9%, or 835 points, after Pfizer announced promising, though early, findings about the effectiveness of its coronavirus vaccine. The S&P 500 finished up 1.2%.

The state of play: The vaccine progress is fueling market optimism about a possible return to normal, as the coronavirus pandemic and social-distancing restrictions have held back the U.S. economy.

By the numbers: The stock market closed at the lowest levels of the day. At one point, the Dow was up more than 5%, while the S&P soared over 3%.

  • The tech-heavy Nasdaq closed down 1.5%, as technology stocks sold off.
  • The Russell 2000, a stock market index that measures America's smallest public companies, jumped 4.3% and closed at its highest level in two years.

Between the lines: Companies that benefited from the stay-at-home economy — largely those in the tech sector — saw their share prices sink.

  • Shares of video-conferencing software company Zoom closed down 17%.

The other side: Companies whose businesses have been crushed by the pandemic saw their share prices jump.

  • The S&P 500's biggest gainers included Carnival Cruises and SL Green Realty, a major office building and shopping center landlord. Shares for those companies rose nearly 40% each.
  • AMC, the world's largest movie theater chain, saw its stock jump as much as 63% on Monday. American Airlines and United both jumped 20%.

The backdrop: Pre-market trading already pointed to a continuation of last week's election-fueled rally, but stocks skyrocketed once the Pfizer news hit.

The big picture: Markets across Europe also shot higher. The STOXX 600 closed up 4%, its best day since March, according to Reuters.

Editor's note: This story has been updated to reflect the stock market close.

Go deeper

Dion Rabouin, author of Markets
Jan 28, 2021 - Economy & Business

How GameStop exposed the market

Illustration: Eniola Odetunde/Axios

Retail traders have found a cheat code for the stock market, and barring some major action from regulatory authorities or a massive turn in their favored companies, they're going to keep using it to score "tendies" and turn Wall Street on its head.

What's happening: The share prices of companies like GameStop are rocketing higher, based largely on the social media organizing of a 3-million strong group of Redditors who are eagerly piling into companies that big hedge funds are short selling, or betting will fall in price.

Updated Jan 28, 2021 - Economy & Business

Senate panel to hold hearing after high-flying Reddit stocks cause Wall Street chaos

Major trading platforms including Robinhood, TD Ameritrade and Interactive Brokers are restricting — or cutting off entirely — trading on high-flying stocks like GameStop and AMC Entertainment.

The latest: Senate Banking Committee Chair Sherrod Brown (D-Ohio) announced Thursday that he plans to hold a hearing on "the current state of the stock market" in response to this week's volatility.

Felix Salmon, author of Capital
Jan 29, 2021 - Economy & Business

The unprecedented stock market craziness, in one chart

Data: Bloomberg; Chart: Sara Wise and Andrew Witherspoon/Axios. Note: Stocks limited to companies with a market capitalization of more than $150 million. 

Almost never does a stock trade more than twice its market value in a single day. It never happened in 2001, for instance, and never happened in 2003, and only happened once in 2002.

Driving the news: It has happened 7 times this week already, and 20 times this month. In the past 12 months, it's happened 84 times, which is more than all of the previous occurrences going back to November 1998.