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Stocks - Dow Gets Hit Late as Vaccine Optimism Cools

Published 05/19/2020, 04:01 PM
Updated 05/19/2020, 04:15 PM
© Reuters.

© Reuters.

By Yasin Ebrahim

Investing.com – Late-selling hit the Dow on Tuesday, as investor sentiment was soured by a report suggesting that Moderna 's potential Covid-19 vaccine may not be as effective as many believe.

The Dow Jones Industrial Average fell 1.59%, or 390 points, the S&P 500 fell 1.07%, while the Nasdaq Composite slipped 0.54%.

Moderna (NASDAQ:MRNA) came under pressure after a STAT News report cooled some of the optimism surrounding the company's potential Covid-19 vaccine. The company also announced a secondary stock offering that would raise more than $1 billion. 

"Several vaccine experts asked by STAT concluded that, based on the information made available by the Cambridge, Mass.-based company, there’s really no way to know how impressive — or not — the (Moderna) vaccine may be,"  STAT News reported.

Moderna had rallied about 20% a day earlier, after announcing positive early-stage clinical results for its potential Covid-19 vaccine.

The downbeat news offset supportive remarks from Federal Reserve Chairman Jay Powell and U.S. Treasury Secretary Steven Mnuchin.

Just days after suggesting the Fed had plenty of ammunition left to support the economy through the pandemic, Federal Reserve Chairman Powell reiterated the central bank's supportive stance on monetary policy.

"We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response,” Powell said Tuesday in remarks to the Senate Banking Committee.

Powell also said he expected the Fed would roll out its Main Street lending and other programs by the end of the month.

Mnuchin, meanwhile, said he expected the economy to recover in the third or fourth quarter and floated the idea of middle-class tax cuts.

Financials fell as investors continue to shun bank stocks on expectations a lower-for-longer interest-rate environment will hurt net interest income.

JPMorgan Chase (NYSE:JPM) fell 1.8%, Goldman Sachs (NYSE:GS) slipped 2.14% and Citigroup (NYSE:C) fell 2.7%.

Investors also had to contend with a turn lower in retail stocks following mixed quarterly results from corporates.

Walmart (NYSE:WMT) gave up gains to close 2.19% lower despite posting quarterly results that topped analysts;' estimates. The beat was driven a 74% surge in U.S. e-commerce sales in the first quarter, as coronavirus-led stockpiling of groceries and household goods bolstered growth.

Home Depot (NYSE:HD) fell 2.6% after the home-improvement retailer reported profits that missed analysts' forecasts.

Department store chain Kohls (NYSE:KSS) fell 7.68% after reporting a wider-than-expected loss and revenue that fell short of expectations in the first quarter.

In tech, Facebook (NASDAQ:FB) climbed 1.76% as it launched a new shopping feature to make easier for companies to sell products on Facebook and Instagram.

Spotify (NYSE:SPOT) jumped 8.41% after inking a multi-year deal to acquire the exclusive rights to world-famous podcast 'The Joe Rogan Experience,' which reportedly racked in about 190 million downloads per month last year.

Energy stocks also contributed to selloff despite oil prices settling higher on growing optimism for a recovery in crude demand.

On the economic front, U.S. housing starts plunged to a record 30.2% in April, pressuring the annual pace down from 1.276 million, revised higher from 1.216 million, to 891 million, the weakest pace since Feb. 2015, according to Jefferies (NYSE:JEF).

Latest comments

bynb is the best stock on the market!
bnb your *****et
Has anyone ever stopped to think that in 150 years of market data we are still in an upward positive trend...never the less to mention that our technological and scientific advancement is extraordinarily perpetual...everything is so cyclical but yet shorts and bearish mentality cant unhinge themselves from their dramatized life style
MRNA overvalued. Changing my mind.
This market is driven mostly by vaccine and reopening news, secondarily by the Fed.
Ok yesterday market up dollar down. Today market down, dollar down, gold up. Let's go for it gold bugs. That is only that makes sense.BUY GOLD!
In the long run it is long.
Why is it whenever they show floor traders, they only show the ones that went long?
why is it when they show floor traders they only use pictures from 1989?
I need 12% correction.
Before interpreting news, why not start with the article from STAT that kicked off the market slide today?  https://www.statnews.com/2020/05/19/vaccine-experts-say-moderna-didnt-produce-data-critical-to-assessing-covid-19-vaccine/. The author buried three important facts down in the article.  1) The test was conducted by the NIH in conjunction with Moderna, Inc.  2) An NIH expert stated the response was promising.  3) A full report will be published by NIH/Moderna shortly. The author's article headline seems fabricated to seed doubt.  Looks like something competitors would write.
I don't need a STAT article to tell me that 8 out of 45 in a small test is not good. The only real positive is that none of them seemed to suffer adverse effects. This rush to believe in a hyped up vaccine is hope ignoring science. talk to me in a year and a real trial and I might get excited. At best they are on the right track for something long into the future.
Located at the bottom of the STAT article was a quote from Anna Durbin, a vaccine researcher at Johns Hopkins University: “I would like to see the data to make my own interpretation of the data. But I think it is at least encouraging that we’ve seen immune responses with this RNA vaccine that we haven’t seen with previous RNA vaccines for other pathogens. Whether it’s going to be enough, we don’t know." If 8 was enough for her to be encouraged its enough for me.  This is only Phase 1.  Nobody pretended they solved it all.
 Muhamed Jaffir New vac/medications have to be dosed correctly to prevent you from being outside of the therapeutic window which could lead to toxicity, or no therapeutic effect. (1) The participants were given low doses of the vac/medication to determine the trough levels. (2) After the trough they work on the peak levels (3) 8 out of 45 were successful on a low dose. That is EXTREMLY PROMISING.
Moderna has the best bet to get to a vaccine. If it creates anti bodies that's all you need. What you not need is a Stat report.
It has been a few days since Trump claimed to cut all relations with China. But nothing has been done so far, not even the talking of the trade war anymore. Obviously Trump chickened out again. How can great America has such a coward president.
He is afraid for investors and the citizens of the US. the stock market will crash and inflation will go rampant if US and China heat up the tension.
Could it be that President Trump is doing something about China of which you are not aware?
they won't let me say that moderns should cure trump D syndrome
It was just yesterday that optimism was so high and drove the market up today the optimis is “low” you soooo much manipulation ! Whats the lie for tomorrow ?
It is just a news driven market, grabbing your money and run😁
it was 45 patients however I believe the rest whole goes deeper. they not telling us the full story about the vaccine story
But didnt we kniw it was a small sample size (8 people) already i dint understand markets sometimes none of this is new news. Can we talk about second wave atleast something a little more resonable
Its all the algos that trigger this. They probably are programmed to observe certain websites and keywords. The same website that published this story is the one that published the story that the WHO believed Remdesivir doesn't work. Do you remember when GILD crashed mid day and brought the whole market down? Same news, same algos.  https://www.statnews.com/2020/05/19/vaccine-experts-say-moderna-didnt-produce-data-critical-to-assessing-covid-19-vaccine/
It was 45 people only 8 responded
The only player in the market above S&P 1900 is FED. Thus the questions is definitely, why it shall be afraid of bad vaccine results - FED cant die ...
Yes it can! Now for the 3rd time in 3 weeks, 24,500 is the limit!!
Moderna yesterday positive, today negative. Optimism game, it is just a comedy
market goes up 3 percent fake rumor of vaccine.... actually doesn't work ... only down a percentgreat stair step manipulation upwait until next week when another drug company makes it false rumor of having a vaccinethe market is a joke
the down turn was an obvious move down as technically it was at major supply zone .
the fed is worried about vaccine news?
no one should afraid of a common flu. during these 2 months millions have died from stroke and cancer
life kills
driving cars also ******** let's ban people from driving
Yes, but I can't give you cancer....
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