May 19, 2020 / 8:02 PM / 7 days ago

US STOCKS-S&P stumbles as Moderna sinks on report questioning trial results

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* Walmart posts strong Q1 results but gains fade

* Home Depot drops after results miss estimates

* Moderna drops after report questions trial data (Updates to market close)

By Chuck Mikolajczak

NEW YORK, May 19 (Reuters) - The S&P 500 closed lower on Tuesday, 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 shares plunged about 10% after the report.

"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 after it missed quarterly profit estimates due to higher costs, while department store operator Kohl's Corp tumbled 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 down after rising as much as 3.4% 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 after the company said same-store sales improved significantly at the start of the second quarter, helping to lift the S&P retailing index.

Trillions of dollars in fiscal and monetary stimulus have helped the S&P 500 rebound nearly 35% from its March 23 intraday low. While the benchmark index is now less than 13% below its Feb. 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 U.S.-China tensions.

The benchmark index surged more than 3% 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 that Congress should consider anything to keep people out of insolvency.

Unofficially, the Dow Jones Industrial Average fell 1.56% to end at 24,213.76 points, while the S&P 500 lost 1.03%, to 2,923.48. The Nasdaq Composite dropped 0.52%, to 9,186.97. 2,923.48.

The Nasdaq Composite dropped 0.52%, to 9,186.97. (Reporting by Chuck Mikolajczak; Editing by Leslie Adler) (c) Copyright Thomson Reuters 2020. Click For Restrictions - here))

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