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Wall Street closes 900 points higher as vaccine news prompts hope of economic recovery

"For the economy to fully recover, people will have to be fully confident. And that may have to await the arrival of a vaccine," Federal Reserve Chairman Jerome Powell has said.

Wall Street soared Monday after U.S.-based drugmaker Moderna said it has seen "positive" results from its first human trial for a vaccine against COVID-19, prompting hope among investors that economic recovery could be on the horizon.

The Dow Jones Industrial Average closed up by around 911 points Monday, a gain of just under 4 percent. The S&P 500 notched up a gain of 3.2 percent, and the Nasdaq was higher by 2.4 percent, their best one-day performances for more than a month.

Tourism and airline stocks also rose, with Delta, American and United recording double-digit gains. MGM Resorts, Carnival Cruise Line and Disney also rallied on the possibility of a return to travel and entertainment.

Full coverage of the coronavirus outbreak

Moderna said its vaccine trial showed that it can prompt an immune response in the human body. It said the potential vaccine was found to be safe and well tolerated in a small group of patients. The drug is now being tested in larger studies.

"We could not be happier about this interim data," said Stéphane Bancel, chief executive of Moderna, based in Cambridge, Massachusetts. He said the results indicate that the vaccine has a "high probability to provide protection from COVID-19 disease in humans."

Moderna shares, which had soared by 30 percent earlier in the day, closed up by 20 percent.

Markets also got a boost after Federal Reserve Chairman Jerome Powell hinted that the economy would pick up pace later this year.

"Assuming there's not a second wave of the coronavirus, I think you'll see the economy recover steadily through the second half of this year," Powell said in an interview that aired Sunday night on CBS' "60 Minutes."

He also emphasized that the discovery of a vaccine is vital to the nation's economic recovery.

"For the economy to fully recover, people will have to be fully confident. And that may have to await the arrival of a vaccine," Powell said.

"The sooner we get the virus under control, the sooner businesses can reopen. And more important than that, the sooner people will become confident that they can resume certain kinds of activity. Going out, going to restaurants, traveling, flying on planes, those sorts of things. So that's really going to tell us when the economy can recover," he said.