Reuters, Globe staff on May 19th, 2020

The S&P 500 closed lower on Tuesday, as investors focused on a report questioning Moderna’s recent coronavirus vaccine early-stage trial results, wiping out modest gains on the benchmark index in the last hour of trading.

Major averages fell to session lows in the wake of a report from STAT News that questioned the validity of the results of Moderna’s vaccine trial, which the company had announced Monday. Moderna shares plunged about 10% after the report.

In Canada, the S&P/TSX Composite Index closed up 246.58 points, or 1.68%, at 14,885.48, as investors here tried to play catch up to the rally Monday on Wall Street that saw the S&P 500 advance 3.2%. Most TSX sectors were higher, led by a 5.10% rally in energy stocks.

“The market is keen on health-care news much more than it is on economic data,” said Art Hogan, chief market strategist at National Securities in New York. “We are largely baking in the second quarter being down significantly – GDP growth rates, earnings, economic data – but what we don’t know, what will drive markets will be incrementally good news on the healthcare front.”

U.S. stocks had initially edged higher as investors attempted to glean information from a mixed bag of results from major retailers.

Home improvement chain Home Depot fell after it missed quarterly profit estimates due to higher costs, while department store operator Kohl’s Corp tumbled after reporting a bigger-than-expected loss.

Walmart Inc, on the other hand, exceeded expectations for quarterly revenue and earnings as online sales soared as consumers stockpiled essentials in response to coronavirus lockdowns. Still, its shares finished down after rising as much as 3.4% earlier.

“Everyone wants to take every retailer’s report of being indicative of something, but at the same time staying open and doing stuff is good, it costs to do that,” said Willie Delwiche, investment strategist at Baird in Milwaukee.

Advance Auto Parts climbed after the company said same-store sales improved significantly at the start of the second quarter, helping to lift the S&P retailing index.

Trillions of dollars in fiscal and monetary stimulus have helped the S&P 500 rebound nearly 35% from its March 23 intraday low. While the benchmark index is now less than 13% below its Feb. 19 closing record, gains have largely slowed in May on uncertainty over truly halting the spread of the coronavirus and allowing business to resume and rising U.S.-China tensions.

The benchmark index’s surge of more than 3% on Monday was boosted by Moderna’s promising early-stage data for a COVID-19 vaccine and Federal Reserve Chair Jerome Powell’s pledge over the weekend to support the economy as needed until the crisis has passed.

Powell, in testimony to the Senate Banking Committee on Tuesday, said the central bank was continuing to consider ways to accommodate additional borrowers, and that Congress should consider anything to keep people out of insolvency.

Unofficially, the Dow Jones Industrial Average fell 1.56% to end at 24,213.76 points, while the S&P 500 lost 1.03%, to 2,923.48. The Nasdaq Composite dropped 0.52%, to 9,186.97. 2,923.48.

The Nasdaq Composite dropped 0.52%, to 9,186.97.

U.S. crude ended slightly higher on Tuesday, as U.S. Treasury Secretary Steven Mnuchin said he supported extending certain measures intended to bolster the economy, while Brent ended lower on concerns that output cuts might not be sufficient.

Oil has rallied for several days following numerous output cuts from major producers to curb supplies, and as demand picks up with governments worldwide easing restrictions on movement put in place to stop the spread of the coronavirus pandemic.

The front-month contract for U.S. West Texas Intermediate crude, which expires on Tuesday, settled up 68 cents a barrel, or 2.1%, at $32.50 a barrel. The July contract, trading at vastly higher volumes, settled up $31.96 a barrel.

One month ago, the June contract pushed into negative territory ahead of expiry. “It has been a best possible scenario race away from negative prices,” said Bob Yawger, director of Energy Futures at Mizuho in New York.

Benchmark Brent crude was settled at $34.65 a barrel, down 16 cents or 0.5%.

The June gold contract was up US$11.20 at US$1,745.60 an ounce and the July copper contract was up 1.4 cents at US$2.42 a pound.

 

https://www.theglobeandmail.com/investing/markets/inside-the-market/market-news/article-premarket-euro-italian-bonds-cheer-eu-recovery-fund-plan/