US: Stocks end lower on mixed earnings

[NEW YORK] 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 Industrial Average ended down 0.6 per cent at 28,679.81.

The broad-based S&P 500 also shed 0.6 per cent to 3,511.93, while the tech-rich Nasdaq Composite Index slipped 0.1 per cent to 11,863.90.

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."

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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 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 per cent while Lilly shed 2.9 per cent.

The companies' announcements were also a drag on the broader market, said Briefing.com 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," Mr 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 per cent, Las Vegas Sands, down 3.0 per cent, and Booking.com, down 3.5 per cent.

Airlines also were weak, including Delta, which fell 2.7 per cent 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 per cent after presenting its first iPhones for the 5G network.

AFP