By Yasin Ebrahim
Investing.com – Late-selling hit the Dow on Tuesday, as investor sentiment was soured by a report suggesting that Moderna ‘s potential Covid-19 vaccine may not be as effective as many believe.
Moderna (NASDAQ:MRNA) came under pressure after a STAT News report cooled some of the optimism surrounding the company’s potential Covid-19 vaccine. The company also announced a secondary stock offering that would raise more than $1 billion.
“Several vaccine experts asked by STAT concluded that, based on the information made available by the Cambridge, Mass.-based company, there’s really no way to know how impressive — or not — the (Moderna) vaccine may be,” STAT News reported.
Moderna had rallied about 20% a day earlier, after announcing positive early-stage clinical results for its potential Covid-19 vaccine.
The downbeat news offset supportive remarks from Federal Reserve Chairman Jay Powell and U.S. Treasury Secretary Steven Mnuchin.
Just days after suggesting the Fed had plenty of ammunition left to support the economy through the pandemic, Federal Reserve Chairman Powell reiterated the central bank’s supportive stance on monetary policy.
“We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response,” Powell said Tuesday in remarks to the Senate Banking Committee.
Powell also said he expected the Fed would roll out its Main Street lending and other programs by the end of the month.
Mnuchin, meanwhile, said he expected the economy to recover in the third or fourth quarter and floated the idea of middle-class tax cuts.
Financials fell as investors continue to shun bank stocks on expectations a lower-for-longer interest-rate environment will hurt net interest income.
Investors also had to contend with a turn lower in retail stocks following mixed quarterly results from corporates.
Walmart (NYSE:WMT) gave up gains to close 2.19% lower despite posting quarterly results that topped analysts;’ estimates. The beat was driven a 74% surge in U.S. e-commerce sales in the first quarter, as coronavirus-led stockpiling of groceries and household goods bolstered growth.
Home Depot (NYSE:HD) fell 2.6% after the home-improvement retailer reported profits that missed analysts’ forecasts.
Department store chain Kohls (NYSE:KSS) fell 7.68% after reporting a wider-than-expected loss and revenue that fell short of expectations in the first quarter.
In tech, Facebook (NASDAQ:FB) climbed 1.76% as it launched a new shopping feature to make easier for companies to sell products on Facebook and Instagram.
Spotify (NYSE:SPOT) jumped 8.41% after inking a multi-year deal to acquire the exclusive rights to world-famous podcast ‘The Joe Rogan Experience,’ which reportedly racked in about 190 million downloads per month last year.
Energy stocks also contributed to selloff despite oil prices settling higher on growing optimism for a recovery in crude demand.
On the economic front, U.S. housing starts plunged to a record 30.2% in April, pressuring the annual pace down from 1.276 million, revised higher from 1.216 million, to 891 million, the weakest pace since Feb. 2015, according to Jefferies (NYSE:JEF).
Stocks – Dow Gets Hit Late as Vaccine Optimism Cools
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