After gaining more than 3% yesterday on positive news around biotech firm Moderna’s coronavirus vaccine trials, stocks tumbled at the end of Tuesday.
The S&P 500 closed down 1% to 2,922.9, having been flat for most of the day until the last trading session after medical news site Stat reported that Moderna had withheld information yesterday when it announced results of stage one trials of a potential Covid-19 vaccine. The company has said additional information will be disclosed in due course, according to Bloomberg.
Moderna shares were down more than 10% for the day to $71.67, and another 4.7% to $68.31 in after-hours trading at 5:20pm, after surging 20% to record highs of $86.28 yesterday on the positive news of its phase one vaccine trials.
Moderna also announced a sale of 17.6 million new shares at a price of $76 each today on the heels of yesterday’s phase one results announcement prompting observers to highlight the timing of the firm’s plan to issue the shares immediately following the announcement. Phase one trials often fail in later testing.
Stocks have been relatively flat for more than a week after rocketing off their March 23 lows in the wake of unprecedented government and Federal Reserve intervention in an economy reeling from the coronavirus. The broader market was down more than 30% for the year on March 23, and has rallied back another 30% since then.
Remarkably, the Nasdaq is in positive territory for the year, with internet-related stocks, including Amazon, Apple, Google, Facebook, and Netflix leading the rally. Amazon entered today’s session up more than 30% for the year, as people in lockdown order groceries and anything else they need online.
Although value sectors have generally been the weaker, energy has been the best performing S&P sector since late March. Its strength was reflected again in the price of the June futures contract for WTI crude, which is up 1.7% to $32.36 per barrel. The May contract closed at a bizarre -$37 in late April shutting down a slew of commodity-based exchange traded products that track the front month contract sometimes with leverage.
The price collapse in late April also had to do with coronavirus and the collapse in demand for transportation fuel. Oil was building up in storage tanks in Cushing, Oklahoma, where it’s typically stored before making its way to refineries.