Wall Street closes lower on vaccine delay, dampened stimulus hopes

By Stephen Culp NEW YORK (Reuters) - Wall Street lost ground on Tuesday, with halted COVID-19 vaccine trials and an elusive U.S. stimulus agreement weighing on sentiment as third quarter earnings season got underway. While all three major stock indexes closed in the red, Microsoft Corp and Amazon.com helped the mitigate the tech-heavy Nasdaq's loss.

Reuters October 14, 2020 02:05:17 IST
Wall Street closes lower on vaccine delay, dampened stimulus hopes

Wall Street closes lower on vaccine delay dampened stimulus hopes

By Stephen Culp

NEW YORK (Reuters) - Wall Street lost ground on Tuesday, with halted COVID-19 vaccine trials and an elusive U.S. stimulus agreement weighing on sentiment as third quarter earnings season got underway.

While all three major stock indexes closed in the red, Microsoft Corp and Amazon.com 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.

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

"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 U.S. 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.

Meanwhile, millions of Americans struggle to make ends meet nearly two-and-a-half months after emergency unemployment assistance expired.

"(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."

JPMorgan Chase & Co and Citigroup Inc were the first two major U.S. banks to report third-quarter results.

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, along with the broader S&P Banking index <.SPXBK> lost ground.

Apple Inc shares slid after unveiling the latest incarnation of its flagship gadget, the iPhone 12 with 5G connectivity.

Unofficially, the Dow Jones Industrial Average <.DJI> fell 158.04 points, or 0.55%, to 28,679.48, the S&P 500 <.SPX> lost 22.51 points, or 0.64%, to 3,511.71 and the Nasdaq Composite <.IXIC> dropped 12.36 points, or 0.1%, 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% 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 International Inc due on Thursday.

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

Planemaker 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. The stock was the heaviest drag on the Dow.

(Reporting by Stephen Culp; Editing by Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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