Wall Street dips on vaccine delay, fading stimulus optimism

By Stephen Culp NEW YORK (Reuters) - Wall Street snapped a four-day winning streak on Tuesday, with a halted COVID-19 vaccine trial and an elusive U.S. stimulus agreement weighing on sentiment as third quarter earnings season kicked off

Reuters October 14, 2020 01:05:18 IST
Wall Street dips on vaccine delay, fading stimulus optimism

Wall Street dips on vaccine delay fading stimulus optimism

By Stephen Culp

NEW YORK (Reuters) - Wall Street snapped a four-day winning streak on Tuesday, with a halted COVID-19 vaccine trial and an elusive U.S. stimulus agreement weighing on sentiment as third quarter earnings season kicked off.

All three major U.S. stock indexes slipped into the red by mid-afternoon.

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. Its shares were last off 2.5%.

"It shows once again that the vaccine is still far away, and it's a good thing that so many pharmaceutical companies are working on it," said Oliver Pursche, president of Bronson Meadows Capital Management in Fairfield, Connecticut. "JNJ looked promising just a few weeks ago and now here's a complete turnaround."

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."

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

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 were down 1.7% and 4.4%, respectively.

Apple Inc unveiled the latest incarnation of its flagship gadget, the iPhone 12 with 5G connectivity. Its shares were down 3.3%.

The Dow Jones Industrial Average <.DJI> fell 164.97 points, or 0.57%, to 28,672.55, the S&P 500 <.SPX> lost 26.45 points, or 0.75%, to 3,507.77 and the Nasdaq Composite <.IXIC> dropped 43.35 points, or 0.36%, to 11,832.91.

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 2.4% 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. Its stock, was down 2.5% was the heaviest drag on the Dow.

Declining issues outnumbered advancing ones on the NYSE by a 2.26-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored decliners.

The S&P 500 posted 37 new 52-week highs and one new low; the Nasdaq Composite recorded 107 new highs and 10 new lows.

(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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