U.S. equity futures were firmer in early trading following an agreement on a continuing resolution to avoid a government shutdown and J&J announcing that it has begun a large phase 3 trial of its COVID-19 vaccine. However, the early gains did not hold and the major averages were all in the red by midday. The selling pressure intensified in the afternoon as the Nasdaq lead on the downside and the Dow saw a bit of a better performance as Nike's (NKE) post-earnings strength helped to ease the broader market pain.
ECONOMIC EVENTS: In the U.S., the FHFA house price index climbed another 1.0% to 293.0 in July, hitting a new all-time high. Markit's manufacturing PMI edged up 0.4 ticks to 53.5 in the flash September print.
Data from the Johns Hopkins Whiting School of Engineering shows there are now 31.7M confirmed cases of COVID-19 worldwide, including 6.9M in the U.S., and 972,372 deaths due to the disease, including 201,000 in the U.S.
TOP NEWS: Shares of Nike rose 8.8% after what Piper Sandler analyst Erinn Murphy called a "slam dunk of a quarter." Guggenheim analyst Robert Drbul, who was among the many on Wall Street to raise his price target on Nike, noted that the company reported earnings of 95c per share that nearly doubled his higher-than-consensus forecast of 51c per share.
Tesla (TSLA) shares fell 10.3% following last night's Battery Day event held by the company. Deutsche Bank analyst Emmanuel Rosner, who upgraded Tesla to Buy from Hold with a price target of $500, said the Battery Day showcased an "impressive trajectory" for Tesla's technology, capacity and cost, which should help extend the company's lead "considerably." Meanwhile, Morgan Stanley's Adam Jonas said Tesla's event "largely lived up to the hype, but didn't clearly exceed it," with his view being that the main takeaways were that Tesla's battery technology is outpacing current growth in supply and that it is "time to spend significantly."
In other auto news, California Governor Gavin Newsom announced that he will "aggressively move the state further away from its reliance on climate change-causing fossil fuels while retaining and creating jobs and spurring economic growth," issuing an executive order requiring sales of all new passenger vehicles to be zero-emission by 2035 and additional measures to "eliminate harmful emissions from the transportation sector."
In COVID-19 news, Johnson & Johnson (JNJ) announced the launch of its large-scale, pivotal, multi-country Phase 3 ENSEMBLE trial for its COVID-19 vaccine candidate, JNJ-78436735. Interim results from the company's Phase 1/2a clinical study demonstrated that the safety profile and immunogenicity after a single vaccination were supportive of further development, the company said. J&J has continued the scaling up of its manufacturing capacity and remains on track to meet its goal of providing 1B doses of a vaccine each year, the company added.
Western Digital (WDC) shares rose 6.7% after the company announced that it is reorganizing and creating separate business units for its Flash and Hard Drive product businesses.
Meanwhile, JPMorgan (JPM) shares were 1.6% lower after Bloomberg reported that the bank is set to pay close to $1B to resolve market manipulation investigations by U.S. authorities into its trading of metals futures and Treasury securities.
Additionally, shares of Delta Air Lines (DAL) fell 2.2% as Bloomberg said that the airline is in talks with Airbus (EADSY) to delay at least 40 aircraft deliveries planned for this year due to the airline's struggles with a travel market hit by the coronavirus pandemic.
MAJOR MOVERS: Among the noteworthy gainers was Twitter (TWTR), which rose 6.1% after Pivotal Research analyst Michael Levine upgraded the stock to Buy from Hold. Also higher was JinkoSolar (JKS), which gained almost 21% after reporting quarterly results.
Among the notable losers was AC Immune (ACIU), which dropped 44.9% after Genentech (RHHBY) said that semorinemab did not meet its primary efficacy endpoint in a Phase 2 trial. Also lower was Regenxbio (RGNX), which fell 1.2% after the FDA requested partner Novartis (NVS) conduct another study of Zolgensma IT in older spinal muscular atrophy patients getting the drug via a spinal infusion.
INDEXES: The Dow fell 525.05, or 1.92%, to 26,763.13, the Nasdaq lost 330.65, or 3.02%, to 10,632.98, and the S&P 500 declined 78.65, or 2.37%, to 3,236.92.
Nike
+10.08 (+8.62%)
Tesla
-43.205 (-10.20%)
Johnson & Johnson
+0.22 (+0.15%)
Western Digital
+2.43 (+6.66%)
JPMorgan
-1.54 (-1.63%)
Delta Air Lines
-0.65 (-2.15%)
+2.6 (+6.08%)
AC Immune
-3.775 (-43.34%)
Roche
+ (+0.00%)
Regenxbio
-0.28 (-0.97%)
Novartis
-1.42 (-1.60%)