U.S. Stock Futures Slip After J&J's Vaccine Trial Hits Snag
13 Oktober 2020 - 11:46AM
Dow Jones News
By Anna Hirtenstein
U.S. stock futures ticked lower Tuesday after Johnson &
Johnson paused its coronavirus vaccine trials, prompting fresh
speculation about when immunization shots may become widely
available.
Futures tied to the S&P 500 fell 0.4%, suggesting that the
gauge may lose some ground after the market opens. A rally in
megacap tech stocks led the broad market index on Monday to its
second-highest close in history.
J&J's vaccine is one of the most advanced Covid-19 shots in
development, and is among just a handful that had entered the last
stage of testing in the U.S. This is the second time such a trial
has been put on hold over a safety concern: AstraZeneca has since
resumed its testing efforts in the U.K., but its clinical trials in
the U.S. remain suspended.
"It's a reminder that while we have this race to get a vaccine,
it could actually take longer," said Paul Jackson, global head of
asset-allocation research at Invesco. People are also being too
optimistic over how quickly a vaccine can halt the pandemic, he
cautioned. "If we get one through the trials and authorized, that
would be a great step, but then it will still take quite some time
to get it widely distributed."
J&J slid almost 3% ahead of the New York opening bell. The
company is scheduled to report earnings at about 6:45 a.m. ET.
In bond markets, the yield on benchmark 10-year Treasury notes
edged down to 0.757%, from 0.775% on Friday. The WSJ Dollar Index,
which tracks the greenback against a basket of currencies, rose
0.2%.
Uncertainty about a second wave of infections and the extent to
which governments may have to renew restrictions to control the
spread is weighing on investors' minds as the third-quarter
earnings season kicks off on Tuesday.
"Earnings season will create a lot of volatility, especially
ahead of the election," said Ludovic Subran, chief economist at
Allianz. "The market focus will remain on financial and tech
earnings: this will be a main driver."
A slew of financial companies including BlackRock, JPMorgan
Chase and Citigroup will report results before the market opens,
starting at about 6 a.m. ET. Their earnings will be closely
scrutinized for fresh projections on loan defaults and indications
on the health of the financial system.
"We will start to see that banks are in a very difficult
position because of the low or negative interest rates in the U.S.
and Europe," Mr. Subran said. "The risk is more of a downside
correction to financials."
Delta Air Lines is also scheduled to report earnings on Tuesday
morning.
Traders are also awaiting the latest inflation data, due out at
8:30 a.m. Consumer prices are expected to have risen in September
for a fourth consecutive month. But inflation pressure is still
likely to be muted, keeping the door open for the Federal Reserve
to continue with its easy-money policy.
In trading ahead of the opening bell, Walt Disney rose 4.3%
after it announced a major reorganization of its business to focus
more on streaming.
Overseas, the pan-continental Stoxx Europe 600 fell 0.2%.
In Asia, most major benchmarks were mixed by the close of
trading. The Shanghai Composite Index was flat after trade data
showed that Chinese exports rose nearly 10% in September,
reflecting a continuing recovery. Markets in Hong Kong were closed
due to Tropical Storm Nangka being slated to hit the city.
The International Monetary Fund is also set to put out an
updated outlook for global economic growth at 8:30 a.m., as finance
ministers and central bankers gather virtually for the IMF and
World Bank's annual meetings.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
October 13, 2020 05:31 ET (09:31 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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