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Wall Street Opens Higher as Merck News Hints at Covid Game-Changer; Dow up 150 Pts

Stock MarketsOct 01, 2021 09:45AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets opened higher on Friday, reversing overnight losses in futures after potentially game-changing news on the pandemic front from U.S. pharma giant Merck. 

Merck announced encouraging early results from a small-scale trial of a antiviral pill to treat Covid-19, which showed a clear drop in the rate of severe illness among those taking it. If the drug is found to be both safe and effective, it could radically change the outlook for building humanity's defenses against the disease. 

Such considerations ensured that the Dow Jones Industrial Average rose 149 points, or 0.4%, higher in the first few minutes of trading, while the S&P 500 rose 0.1%. The Nasdaq Composite, which habitually underperforms on news supporting the reopening of pandemic-stricken economies, fell 0.2%. 

All three indices had been clearly lower in premarket trading before Merck's news broke.

Merck stock rose 7.8% on the news. Before the news, it had been down around some 10% since the start of the pandemic, underperforming rivals such as Moderna and Pfizer who had successfully brought to market a new generation of messenger RNA-based vaccines.

Moderna (NASDAQ:MRNA) stock was down 9.8% on the news, while BioNTech (NASDAQ:BNTX) stock was down 11% and Pfizer Inc (NYSE:PFE) stock down 2.2%. Novavax (NASDAQ:NVAX) stock fell 17%, while AstraZeneca (NASDAQ:AZN) ADRs fell 1.2%.

The news also gave wings to other sectors typically sensitive to social distancing and lockdown measures. Delta Air Lines (NYSE:DAL) stock rose 5.2% while United Airlines (NASDAQ:UAL) stock rose 5.8% and American Airlines (NASDAQ:AAL) stock rose 3.7%.  Hotel operators Hyatt (NYSE:H) and Marriott (NASDAQ:MAR) each rose 3.8%, and cruise operators Carnival (NYSE:CCL) and Royal Caribbean (NYSE:RCL) both rose around 4%. Uber (NYSE:UBER) stock rose 3.6%.

Elsewhere, Jefferies  (NYSE:JEF) stock rose 1.9% after reporting earnings that nearly doubled in the latest quarter due to the boom in merger and acquisition activity in the U.S. 

Zoom Video (NASDAQ:ZM) stock rose 0.6% and Five9 (NASDAQ:FIVN) stock rose 0.5% as the two companies abandoned plans to combine. 

Earlier, a week full of economic data had ended on an upbeat note, with both the Institute of Supply Management's manufacturing survey and the University of Michigan's consumer sentiment coming in ahead of expectations. The ISM study in particular remains indicative of a strong expansion, with an index at a four-month high of 61.1. Personal income and spending data, released earlier showed incomes nearly flatlining in August, but spending still running ahead of expectations with a monthly gain of 0.8%. 

Price data for personal consumer expenditures, the Federal Reserve's preferred measure of inflation, didn't change expectations that the Federal Reserve will begin phasing out its bond purchases in November. Minnesota Fed President Neel Kashkari, a noted inflation 'dove' said on Thursday said he was comfortable with such a timeline, suggesting that there is no resistance among policymakers to such a move.

Wall Street Opens Higher as Merck News Hints at Covid Game-Changer; Dow up 150 Pts
 

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Comments (16)
Devaraj Krishnamoorthy
Devaraj Krishnamoorthy Oct 01, 2021 11:32AM ET
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If it was such a game changer S&P should have been up atleast 2-3%. Feel market is looking beyond covid and more concerned with inflation, tapering, possible early rate hikes and ofcourse china.
ben sc
ben sc Oct 01, 2021 11:22AM ET
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it mimics an already existing generic that rhymes with mIVERmectin. the cure already exists.
Ben Taylor
Ben Taylor Oct 01, 2021 11:12AM ET
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Well that was short lived its 10am and headed to a negative market.
Mitchel Pioneer
Mitchel Pioneer Oct 01, 2021 11:12AM ET
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It's fraudulent Friday, and the magic show is well underway.  The breakers are already firing at the break- even point to keep the laughingstock of the financial world in the green.  The criminal intervention continues in the greatest investment fraud in history.
Sean Arora
Sean Arora Oct 01, 2021 11:10AM ET
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How much of this new pill contains ivermectin?
Hans Meier
Hans Meier Oct 01, 2021 10:30AM ET
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Eat healthy, get vitamin D, do sports, watch your weight and you dont need any pills for most of your live.
Greg Mako
Greg Mako Oct 01, 2021 10:30AM ET
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And you should check your head.
RICHARD FORD
RICHARD FORD Oct 01, 2021 10:20AM ET
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a drug that will cost 5000 times the price of ivermectin and do exactly the same thing, go big pharma!!!
William Bailey
William Bailey Oct 01, 2021 10:20AM ET
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Opened higher on Fed pump
Ashish Aggarwala
Ashish Aggarwala Oct 01, 2021 10:15AM ET
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If covid/delta spreads in the US, jobs data will deteriorate and the fed cant implement their taper policies .. market goes up. Now this drug news will help contain delta/covid spread —> market goes up. Funny it is
William Bailey
William Bailey Oct 01, 2021 10:15AM ET
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Free credit will stop …. Grab that cash chair
Ashish Aggarwala
Ashish Aggarwala Oct 01, 2021 10:14AM ET
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If covid/delta spreads in the US, jobs data will deteriorate and the fed cant implement their taper policies .. market goes up. Now this drug news will help contain delta/covid spread —> market goes up. Funny it is
perplexed76 .
perplexed76 . Oct 01, 2021 10:04AM ET
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drug rally!
John Avenetti
John Avenetti Oct 01, 2021 9:53AM ET
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sham
Humayun Ahmed
Humayun Ahmed Oct 01, 2021 9:53AM ET
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in Bangladesh
Sajjad Mansab Sajjad Mansab
Sajjad Mansab Sajjad Mansab Oct 01, 2021 9:52AM ET
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😭💵
William Bailey
William Bailey Oct 01, 2021 9:50AM ET
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Absolute hogwash ….
kalyan kumar
kalyan kumar Oct 01, 2021 9:49AM ET
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In India Pghl investors will celebrate on Monday
 
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