U.S. stock averages extend rally despite unrest at home, trade worries abroad
Stocks are extending their recent rally despite an increasing number of U.S. cities seeing civil unrest after the death of George Floyd at the hands of police sparked demonstrations across the country. The collection of violent and non-violent protests in a number of U.S. cities over the weekend have prompted fresh concerns over a run-up in infections that could curtail the ability of states to more fully reopen. Also, worries over U.S.-China trade relations remain in focus after Bloomberg reported that China has ordered firms to stop importing some U.S. farm goods.
ECONOMIC EVENTS: In U.S. data, Markit's manufacturing index was unchanged at 39.8 versus the flash May reading. Though it's a little better than the all-time low of 36.1 in April, it's the second lowest on record. In contract, ISM's manufacturing index bounced 1.6 points to 43.1 in May from an 11-year low of 41.5 in April, which was better than expected. The construction spending report revealed an April headline drop of just 2.8%, following big upward revisions for February and March that left a much stronger than expected report.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now 6.2M confirmed cases of COVID-19 worldwide, including about 1.8M in the U.S., and 372,657 deaths due to the disease.
TOP NEWS: Amazon (AMZN) scaled back deliveries and adjusted routes in cities including Chicago and Los Angeles, Apple (AAPL) kept some outlets shut, while Target (TGT) extended store closures nationwide after the death of George Floyd sparked demonstrations across the country, Bloomberg reported. "We are monitoring the situation closely and in a handful of cities we adjusted routes or scaled back typical operations to ensure the safety of our teams," an Amazon spokeswoman told Bloomberg News.
Target said in a statement this weekend that its decision to adjust hours or close stores temporarily was due to the safety of its team and guests being top priority, although the company also expressed that it was "heartbroken by the death of George Floyd and the pain it is causing communities across the country." Target added that it will reopen stores on their normally scheduled hours "as soon as it is safe to do so."
Shares of Eli Lilly (LLY) are fractionally lower near noon after the company announced patients have been dosed in what it called "the first study of a potential antibody treatment designed to fight COVID-19." The investigational medicine, referred to as LY-CoV555, is the first to emerge from the collaboration between Lilly and AbCellera to create antibody therapies for the prevention and treatment of COVID-19, the company added. In other COVID-19 research news, Moderna (MRNA) announced that the first participants in each age cohort have been dosed in the company's Phase 2 study of its mRNA vaccine candidate against the novel coronavirus while Gilead Sciences (GILD) reported top-line results from the SIMPLE Phase 3 trial testing remdesivir in moderate COVID-19 patients.
In M&A news, Coty (COTY) announced a strategic transaction for its Professional and Retail Hair business, including the Wella, Clairol, OPI and ghd brands, valuing the businesses at $4.3B on a cash- and debt-free basis. Following the deal, KKR (KKR) will own 60% of this separately managed entity and Coty will own the remaining 40%. Zynga (ZNGA) announced an agreement to acquire Peak, the maker of the Toon Blast and Toy Blast game franchises, for $1.8B.
MAJOR MOVERS: Among the noteworthy gainers was Myovant Sciences (MYOV), which rose 32% after it submitted a new drug application to the FDA for its relugolix combination tablet.
Also higher was Gap (GPS), which gained 12% after JPMorgan analyst Matthew Boss upgraded the stock to Neutral from Underweight.
Among the notable losers was Evolent Health (EVH), which fell 26% after it said that partner Passport Health Plan was not awarded a Kentucky Managed Care Organization contract for the next contract period.
Also lower was Abbott (ABT), which slipped 2% after Goldman Sachs analyst Amit Hazan downgraded the shares to Sell from Neutral.
INDEXES: Near midday, the Dow was up 44.61, or 0.18%, to 25,427.72, the Nasdaq was up 35.40, or 0.37%, to 9,525.27, and the S&P 500 was up 5.59, or 0.18%, to 3,049.90.