Stocks up as consumer confidence index stabilizes, Trump says states should open 'ASAP'
The S&P and Dow are rallying amid a surge in risk-on sentiment amid the easing of lockdowns in the U.S. and globally, which is overshadowing elevated geopolitical risks. President Trump tweeted earlier that the stock market is "up BIG, DOW crosses 25,000. S&P 500 over 3000. States should open up ASAP," adding that "next year will be one of the best ever!" In addition to enthusiam about reopening, hopes for rapid development of a vaccine were underpinned by news from several drugmakers.
ECONOMIC EVENTS: In U.S. data, the Chicago Fed national activity index dropped 11.77 points to -16.74 in April to hit a new record low. The Case Shiller 20-City home price index rose 1.1% to 222.2 in March to hit a record high. Meanwhile, the FHFA home price index increased 0.1% to 287.9 in March. New home sales sharply beat estimates with a 0.6% April rise to 623,000 homes. The Conference Board consumer confidence index rose to 86.6 in May from a 6-year low of 85.7 in April.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now over 5.5M confirmed cases of COVID-19, including nearly 1.7M in the U.S., and 347,085 deaths worldwide due to the disease.
TOP NEWS: Shares of Merck (MRK) are up 2% after the Dow member announced what it called "three significant scientific initiatives" to combat COVID-19. Among those, Merck agreed to acquire privately-held Themis, which is part of a consortium that is supported by funding from the Coalition for Epidemic Preparedness Innovations to develop a vaccine candidate targeting SARS-CoV-2 for the prevention of COVID-19. In addition, Merck said it will collaborate with IAVI to develop a vaccine against COVID-19 and that it will collaborate with Ridgeback Bio to advance development of an oral antiviral candidate for COVID-19, EIDD-2801.
Novavax (NVAX) shares are 8% higher at midday after the company announced the enrollment of the first patient in its anticipated Phase I/II clinical study of NVX-CoV2373, the nanoparticle vaccine candidate with Matrix-M adjuvant to protect against coronavirus. Novavax has rapidly advanced NVX-CoV2373 to become one of the leading vaccine candidates in clinical testing globally, B. Riley FBR analyst Mayank Mamtani said following the news.
Meanwhile, Regeneron (REGN) and Sanofi (SNY) announced a secondary offering of approximately $7B of Sanofi-owned Regeneron common stock and a further $5B stock repurchase of Sanofi-owned stock by Regeneron. Piper Sandler analyst Christopher Raymond said that Sanofi's investment exit has been well telegraphed since late last year, and Regeneron repurchasing $5B of common stock directly from Sanofi is a "pleasant offset."
MAJOR MOVERS: Among the noteworthy gainers was Argenx (ARGX), which rose 36% after the company announced topline data from the pivotal ADAPT trial of efgartigimod, which met its primary endpoint defined as percentage of responders on the Myasthenia Gravis Activities of Daily Living, or MG-ADL, score among acetylcholine receptor-antibody positive generalized myasthenia gravis patients.
Among the notable losers was Hertz Global (HTZ), which fell after the company announced late Friday that it and certain of its U.S. and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.
INDEXES: Near midday, the Dow was up 670.22, or 2.74%, to 25,135.38, the Nasdaq was up 89.31, or 0.96%, to 9,413.90, and the S&P 500 was up 55.95, or 1.89%, to 3,011.40.