Just as a promising announcement about a vaccine candidate helped ignite a sensational rally on Monday, less-good news on Tuesday knocked the market from its session high in the final hour of trading. U.S. stocks closed in the red after spending the day around the break-even line.
Positive vaccine news from Moderna (MRNA) fueled Monday’s rally, giving an especially strong boost to coronavirus-sensitive stocks like airlines or hotel chains, but a report from health-care news website STAT on Tuesday afternoon highlighted some skepticism in the scientific community about the announcement. Moderna shares fell over 10%, after rising more than 20% on Monday.
Dow Jones Industrial Average
closed down 391 points, or 1.6%. The
fell 1.1%, while the Nasdaq Composite slipped 0.5%. The small-cap Russell 2000 index closed down 1% after a 6.4% surge on Monday.
European stocks were mostly in the red too, following their own large gains on Monday. The Stoxx Europe 600 index closed down 0.6%, France’s CAC 40 fell 0.9%, the German DAX rose 0.1%, and the U.K.’s FTSE 100 Index lost 0.8%.
It was a different story on Monday when the
rallied 3.2% — and international markets surged even more. The index is now down 8.6% year to date, after rising 35% from its late-March lows.
“Monday’s developments illustrate that, even after around a month of rangebound trading, equities continue to have upside potential, provided investors can see clearer evidence of a path to sustained economic normality,” said Mark Haefele, chief investment officer of global wealth management at UBS.
Following a lackluster Monday, markets in Asia caught up with the rally on Tuesday. Japan’s Nikkei 225 rose 1.5%, China’s Shanghai Composite index closed up 0.8% on Monday, and Hong Kong’s Hang Seng gained 1.9%.
Haven assets were mixed after selling off on Monday as investors piled into stocks. The price of gold was up 0.9%, to $1,749.30 an ounce. The yield on the 10-year U.S. Treasury note fell 3 basis points, or hundredths of a percentage point, to 0.711%, as the price of the securities rose. The U.S. Dollar Index (DXY)—which measures the greenback against a basket of other currencies—ticked down 0.33%.
Oil prices were higher again on Tuesday. West Texas Intermediate crude settled up 2.1%, at $32.50, after rising 8.1% Monday. Oil prices are up more than 70% so far in May.
Energy-related shares were lower in Tuesday trading, after soaring on Monday.
(OXY) shares were down 2.5%; the stock rose 9% Monday.
(HAL) shares fell 1%, after a 17% surge.
(CVX) stock slipped 1.8%, after rising 5.3% on Monday.
Home Depot earned $2.08 a share in its fiscal first quarter ending April. Wall Street was looking for $2.27. It looks like a big shortfall, but higher costs, including extra pay for workers in a Covid-19 world, cost the company 60 cents a share.
Sales were a bright spot, growing 7.1% to $28.3 billion, easily topping analysts’ estimates of $27.5 billion. Shares have had a solid year, up 12.4%, but the stock fell 1.7% on Tuesday.
Costs for cleaning were higher, but sales grew 8.6% to $134.6 billion, easily topping analyst estimates of $132.7 billion. Shares were up 7.4% year to date and gave up an earlier gain to fall 1.5% on Tuesday.
Both companies withdrew their full-year financial forecasts. Most firms have done the same when reporting first-quarter numbers.