Dow and S&P 500 hit new record highs after Moderna says vaccine is 94.5% effective

London(CNN Business) US stocks rallied on Monday after Moderna said its experimental Covid-19 vaccine is highly effective.

The Dow and the S&P 500 both notched new record highs.

The Dow (INDU) finished up 1.6%, or 471 points. The index closed only about 50 points below the 30,000 mark, a level it has not crossed in its history.

The S&P 500 (SPX) closed up 1.2%, and the Nasdaq (COMP) ended 0.8% higher.

Shares of Moderna (MRNA) closed 9.6% higher after the company said in a statement that the first interim analysis of Phase 3 trial results showed its vaccine candidate was 94.5% effective against coronavirus.

It's another breakthrough in the fight against coronavirus that could eventually help the world's biggest economies recover from deep recessions.

Last week, Pfizer (PFE) said that a vaccine it developed with German drugmaker BioNTech was more than 90% effective against Covid-19.

There are dozens more potential vaccines in development, and the promising test results from Moderna and Pfizer suggest that vaccines may be an effective way to fight the coronavirus. Both vaccines require two doses to be administered.

US stocks rallied from the opening bell following Moderna's early-morning announcement.

Neil Shearing, group chief economist at Capital Economics, wrote in a research note on Monday before the Moderna results were announced that vaccine breakthroughs show "there is finally light at the end of the tunnel."

"Forget the fact President Trump has refused to concede defeat in the US election, or that Europe and the US remain gripped by new waves of the virus, or that another key Brexit deadline has passed and a 'no deal' exit is edging closer. Markets are focused on the increasing likelihood of a vaccine breakthrough," he wrote.

Yet there are reasons for investors to temper their enthusiasm. It will take months for the vaccines to be distributed, and the number of coronavirus cases in the United States is surging. Big economies in Europe such as France, Germany, and the United Kingdom have been locked down for a second time.

Moderna said Monday that it expects to have roughly 20 million doses of its vaccine ready to ship in the United States by the end of this year. The company is on track to manufacture 500 million to 1 billion doses globally in 2021, it added.

Pfizer told CNN last week that it expects to have 50 million vaccine doses globally this year, and 1.3 billion in 2021.