You are here: Home » International » News » Markets
Business Standard

Wall Street closes lower on vaccine delay, dampened stimulus hopes

While all three major stock indexes closed in the red, a gain Microsoft Corp shares helped the mitigate the tech-heavy Nasdaq's loss

Topics
Wall Street | US stocks | Coronavirus Vaccine

Reuters 

coronavirus, wall street, markets
Johnson & Johnson announced on Monday it was pausing clinical trials of a Covid-19 vaccine candidate due to an unexplained illness in a study participant

lost ground on Tuesday, with halted Covid-19 vaccine trials and an elusive US stimulus agreement weighing on sentiment as third quarter earnings season got underway.

While all three major stock indexes closed in the red, a gain Microsoft Corp shares helped the mitigate the tech-heavy Nasdaq's loss.

Johnson & Johnson announced on Monday it was pausing clinical trials of a Covid-19 vaccine candidate due to an unexplained illness in a study participant. The delay weighed on the company's shares, even after its beat-and-raise earnings report. Its shares lost 2.3 per cent.

Late in the session, rival Eli Lilly & Co said it was also halting its coronavirus antibody trial because of safety concerns, sending its shares down 2.9 per cent.

"We have this recent spike in coronavirus cases coinciding with big drug companies halting vaccine trials," said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York. "That's making the market nervous and in response, you're seeing the lockdown stocks moving higher." Hopes for the passage of a new coronavirus relief package faded as US House Speaker Nancy Pelosi rejected the $1.8 trillion coronavirus relief proposal from the White House, saying it "falls significantly short of what this pandemic and deep recession demand."

Senate Majority Leader Mitch McConnell said the Republican-led Senate would vote on a targeted pared-down stimulus package on Monday."(Washington is) playing with the market's emotions and individuals' financial futures," SlateStone Wealth's Pavlik added. "As this continues, the market is looking past what they're saying because it truly believes stimulus will come some time after the election."

Although JPMorgan handily beat consensus profit estimates, gaining from a boom in its trading business, its peer Citigroup, while also beating expectations, was slammed by low interest rates and a slowdown in loan demand. Their shares dropped 1.6 per cent and 4.8 per cent, respectively.

The broader S&P Banking index lost 2.7 per centApple Inc unveiled the latest incarnation of its flagship gadget, the iPhone 12 with 5G connectivity. Its shares were down 2.7 per cent.The Dow Jones Industrial Average fell 157.71 points, or 0.55 per cent, to 28,679.81, the S&P 500 lost 22.29 points, or 0.63 per cent, to 3,511.93 and the Nasdaq Composite dropped 12.36 points, or 0.1 per cent, to 11,863.90.Third-quarter reporting season has left the starting gate, and analysts now see S&P 500 earnings, in aggregate, falling by 19.6 per cent year-on-year, according to Refinitiv.

Other earnings on tap this week include Bank of America Corp , Goldman Sachs Group Inc, Wells Fargo & Co , UnitedHealth Group and United Airlines Holdings Inc expected on Wednesday, with Morgan Stanley and Honeywell Inc due on Thursday.

Shares of Delta Air Lines Inc dropped 2.7 per cent after the commercial carrier reported a 76 per cent plunge in quarterly revenue and announced it has delayed a targeted halt to its cash bleed.

Plane maker Boeing Co reported order cancellations for its grounded 737 MAX aircraft and said deliveries were less than half the number as the same month a year ago. Its stock, was down 3.1 per cent was the heaviest drag on the Dow.

Declining issues outnumbered advancing ones on the NYSE by a 2.00-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored decliners.

The S&P 500 posted 39 new 52-week highs and one new low; the Nasdaq Composite recorded 123 new highs and 14 new lows.

Volume on US exchanges was 8.50 billion shares, compared with the 9.72 billion average over the last 20 trading days.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, October 14 2020. 02:08 IST
RECOMMENDED FOR YOU
.