Stocks end higher as vaccine candidate news lends new optimism to reopening plans
Stocks were pointing to a higher open after Federal Reserve Chairman Jerome Powell said in a rare interview with CBS News' "60 Minutes" that an economic recovery might take until the end of 2021, but also delivered a relatively upbeat message that he didn't foresee a Great Depression, that banks are healthy, and that there
is "no limit" to what the Federal Reserve can do to help. The advance was cemented, and boosted, after Moderna reported "encouraging" early stage study data on its vaccine candidate against novel coronavirus. With today's broad-based rally, the Nasdaq is back to being about 4% below its all-time high.
ECONOMIC EVENTS: In U.S. data, the NAHB housing market index bounced 7 points to 37 in May after the record 42 point plunge to 30 in April.
The latest data from the Johns Hopkins Whiting School of Engineering shows there are now 4.75M confirmed cases of COVID-19, including 1.5M in the U.S., and 315,822 deaths worldwide due to the disease. In New York, Governor Andrew Cuomo reported 106 virus deaths in the state yesterday versus 139 deaths the previous day.
TOP NEWS: Shares of Moderna (MRNA) surged almost 20% after the company reported interim clinical data of mRNA-1273, its vaccine candidate against novel coronavirus, from a Phase 1 study led by the National Institute of Allergy and Infectious Diseases. "These interim Phase 1 data, while early, demonstrate that vaccination with mRNA-1273 elicits an immune response of the magnitude caused by natural infection starting with a dose as low as 25 microgram," said Tal Zaks, Chief Medical Officer at Moderna.
Shares of GSX Techedu (GSX) fell 7.4% after Muddy Waters said it was short the shares of what it calls a "near-total fraud." The firm, which claims that at least 70% of GSX Techedu's users "are fake, and we think it's quite likely that at least ~80% of its users are fake," joins promiment short-selling peer Citron Research in making claims of fraud at the Chinese company.
Uber Technologies (UBER) advanced 3.5% after the ride-sharing giant announced plans to further reduce its operating expenses "in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the company's business." The company noted that, as a result, it is stopping some of its non-core investments and reducing the size of its workforce by around 3,000 people.
Meanwhile, J.C. Penney (JCP) shares dropped 22.7% after the company filed for Chapter 11 Bankruptcy on Friday. In addition, the company said in a regulatory filing today that it has received approvals from the U.S. Bankruptcy Court for the Southern District of Texas for the "First Day" motions related to the company's voluntary Chapter 11 petitions, including approval for the company to access and use its approximately $500M in cash collateral.
MAJOR MOVERS: Among the noteworthy gainers was Spirit Airlines (SAVE), which rose 24.7% after Evercore ISI analyst Duane Pfennigwerth upgraded the stock to Outperform from In Line. Also higher was PBF Energy (PBF), which gained 20.1% after reporting quarterly results.
Among the notable losers was ForeScout (FSCT), which fell 23.5% after Advent provided notice that it would not be proceeding to consummate the acquisition of the company as scheduled. Also lower was Chegg (CHGG), which slid 6.7% after BMO Capital analyst Jeffrey Silber downgraded the stock to Market Perform from Outperform.
INDEXES: The Dow rose 911.95, or 3.85%, to 24,597.37, the Nasdaq gained 220.27, or 2.44%, to 9,234.83, and the S&P 500 advanced 90.21, or 3.15%, to 2,953.91.
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