Stocks Decline After Virus-Drug Test Disappoints: Markets Wrap
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(Bloomberg) -- U.S. stocks closed mostly lower after a report said that a leading experimental coronavirus drug performed poorly in a test. Crude oil climbed back above $16 a barrel.
The benchmark S&P 500 finished in the red after whipsawing investors between gains and losses in the last few hours of trading. Gilead Sciences Inc.’s antiviral drug remdesivir flopped in its first randomized clinical trial, the Financial Times reported, citing draft documents published accidentally by the World Health Organization. The drug company disputed that characterization.
“Investors have pinned their hopes on continued progress toward curve flattening and eventually a vaccine. They are willing to look past negative economic prints for now and focus on more favorable developments that suggest current headwinds could prove transitory,” said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. “Today’s sudden reaction illustrates how fickle investors are in the current environment.”
The S&P 500 had been on pace for a second consecutive gain before the Gilead news. Exxon and Chevron were the biggest gains in the energy sector. Crude oil climbed in New York, two days after futures dropped below zero. Equities had gained earlier even after a report showed U.S. jobless claims surged by 4.4 million last week. Total job losses now exceed 26 million in the wake of the economic shutdown prompted by the coronavirus pandemic.
Elsewhere, the dollar was little changed against most major peers. Gold managed its first back-to-back gain in over a week as investors weighed the prospects of another wave of stimulus in virus-hit economies.
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- West Texas Intermediate crude for June rose 23% to $17 a barrel.
©2020 Bloomberg L.P.