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US stocks end lower on mixed earnings

2020-10-14 HKT 04:52
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  • Investors were also rattled by the pausing of major clinical trials for Covid-19 treatments. Photo: Shutterstock
    Investors were also rattled by the pausing of major clinical trials for Covid-19 treatments. Photo: Shutterstock
Wall Street stocks fell on Tuesday following mixed earnings as clinical trials were paused for leading coronavirus pharmaceuticals, dragging on travel stocks.

The Dow Jones ended down 0.6 percent at 28,679.

The S&P 500 also shed 0.6 percent to 3,511, while the Nasdaq slipped 0.1 percent to 11,863.

Earnings season got underway with reports from top banks among others. JPMorgan Chase and Citigroup both topped analyst expectations, but executives from the two banks said more stimulus was needed from Washington to support the economy.

Shares of both banks fell, along with those of Johnson & Johnson, which announced that it had temporarily halted its Covid-19 vaccine trial because one of its participants had become sick.

J&J said that serious adverse events (SAEs), such as accidents or illnesses, are "an expected part of any clinical study, especially large studies."

Company guidelines allow them to pause a study to determine if the SAE was related to the drug in question, and whether to resume the trial.

J&J's announcement was followed on Tuesday afternoon by news that Eli Lilly had also paused a trial of a coronavirus antibody treatment out of safety concerns.

Shares of J&J dropped 2.3 while Lilly shed 2.9 percent.

The companies' announcements were also a drag on the broader market, said analyst Patrick O'Hare.

"Any kind of delay is just kind of bothersome to a stock market and a world that is chomping at the bit for some kind of safe and effective remedy that can go mainstream," O'Hare said.

Travel-related stocks, which are seen as major beneficiaries of a coronavirus vaccine, suffered especially big drops.

This group included Marriott International, down 2.5 percent, Las Vegas Sands, down 3.0 percent, and, down 3.5 percent.

Airlines also were weak, including Delta, which fell 2.7 percent after reporting a US$5.4 billion loss.

Apple, which had surged on Monday ahead of a product unveiling event, gave back some of the gains, finishing down 2.7 percent after presenting its first iPhones for the 5G network. (AFP)