NEW YORK, May 20 — The S&P 500 closed lower yesterday, as investors focused on a report questioning Moderna’s recent coronavirus vaccine early-stage trial results, wiping out modest gains on the benchmark index in the last hour of trading.
Major averages fell to session lows in the wake of a report from STAT News that questioned the validity of the results of Moderna’s vaccine trial, which the company had announced Monday. Moderna Inc shares plunged after the report, and closed down 10.41 per cent.
“The market is keen on health-care news much more than it is on economic data,” said Art Hogan, chief market strategist at National Securities in New York. “We are largely baking in the second quarter being down significantly — GDP growth rates, earnings, economic data — but what we don’t know, what will drive markets will be incrementally good news on the healthcare front.”
Stocks had initially edged higher as investors attempted to glean information from a mixed bag of results from major retailers.
Home improvement chain Home Depot fell 2.96 per cent after it missed quarterly profit estimates due to higher costs, while department store operator Kohl’s Corp tumbled 7.65 per cent after reporting a bigger-than-expected loss.
Walmart Inc, on the other hand, exceeded expectations for quarterly revenue and earnings as online sales soared as consumers stockpiled essentials in response to coronavirus lockdowns. Still, its shares finished 2.12 per cent down after rising as much as 3.4 per cent earlier.
“Everyone wants to take every retailer’s report of being indicative of something, but at the same time staying open and doing stuff is good, it costs to do that,” said Willie Delwiche, investment strategist at Baird in Milwaukee.
Advance Auto Parts climbed 3.59 per cent after the company said same-store sales improved significantly at the start of the second quarter.
Trillions of dollars in fiscal and monetary stimulus have helped the S&P 500 rebound nearly 35 per cent from its March 23 intraday low. While the benchmark index is now less than 13 per cent below its February 19 closing record, gains have largely slowed in May on uncertainty over truly halting the spread of the coronavirus and allowing business to resume and rising US-China tensions.
The benchmark index surged more than 3 per cent on Monday, boosted by Moderna’s promising early-stage data for a Covid-19 vaccine and Federal Reserve Chair Jerome Powell’s pledge over the weekend to support the economy as needed until the crisis has passed.
Powell, in testimony to the Senate Banking Committee on Tuesday, said the central bank was continuing to consider ways to accommodate additional borrowers, and Congress should consider anything to keep people out of insolvency.
The Dow Jones Industrial Average fell 390.51 points, or 1.59 per cent, to 24,206.86, the S&P 500 lost 30.97 points, or 1.05 per cent, to 2,922.94 and the Nasdaq Composite dropped 49.72 points, or 0.54 per cent, to 9,185.10.
Declining issues outnumbered advancing ones on the NYSE by a 1.43-to-1 ratio; on Nasdaq, a 1.63-to-1 ratio favoured decliners.
The S&P 500 posted 11 new 52-week highs and no new lows; the Nasdaq Composite recorded 60 new highs and seven new lows.
Volume on US exchanges was 10.66 billion shares, compared to the 11.34 billion average for the full session over the last 20 trading days. — Reuters
