Before The Bell
After the stock market closed yesterday, Pfizer (PFE) received an endorsement from the FDA vaccine advisory committee, as that body recommended that the company's COVID-19 vaccine be distributed to the American public. The vote was 17-4. This action had been expected. Still, the stock rose modestly in price last evening.
Now, the vaccine needs the go ahead from the full FDA and from the CDC, both of which it could secure by early next week. Action in the futures, meantime, was mildly positive last night. But the early read in the market this morning is decidedly downbeat, following news that Senate leader McConnell had rejected a bipartisan COVID-19 relief plan, while the House adjourned until next week.
As for the stock market, following a weak September-October stretch and a very strong November, it has seen some up-and-down action so far in December. Yesterday was the latest example, as the Dow Jones Industrial Average began the day moderately to the downside, and after attempting to pare those deficits, traded lower again into the mid-afternoon, holding low triple-digit losses for much of the session. The NASDAQ did somewhat better, though, on strength in tech stocks.
As has been the case recently, it was a tug of war between promising news on the vaccine front, in particular at the aforementioned drug behemoth Pfizer, and the dour tidings on the coronavirus disease front itself. Here, new cases have continued to spin out of control, with infections easily surpassing 200,000 a day, while Wednesday saw more than 3,000 deaths from this pandemic--a record. Also, on the economic front, we saw a pair of somewhat worrisome issuances.
First, the Labor Department reported that weekly jobless claims had jumped by 137,000 to 853,000. That number was not only well above expectation, but was the highest seven-day tally since the middle of September. The surge in claims underscores the damage currently being done to the U.S. economy by the sharp rise in COVID-19 cases in recent weeks. Also, slightly disconcerting was a report showing that the Consumer Price Index had risen more than forecast in November.
Meanwhile, investors continued to sit on the fence as the afternoon wore on, with the Dow's loss easing somewhat, while the uptick in the NASDAQ remained in place. Indeed, the gains on that latter index managed to firm up a touch. As to individual sectors, the energy group rallied on higher crude oil prices on the day. Among individual issues, shares of Starbucks (SBUX) rose after the giant coffee maker and seller issued upbeat guidance.
As for individual groups, energy easily led the way, jumping more than 2% during the session while the industrials, materials, and communication services led the decliners. Regarding late action in the stock market, we saw another modest easing in the Dow's triple-digit point decline, so that at the close the blue chips were off a modest 70 points. The S&P 500 also ticked lower a bit, while the NASDAQ gained 67 points in another uneven session.
Now, as a new day starts, all eyes are again on Washington, where as noted, the stimulus news is not good at this time.
– Harvey S. Katz, CFA
At the time of this article's writing, the author had positions in PFE.
