Wall Street stumbles on halted COVID vaccines, US stimulus delays

All three major stock indexes closed in the red on Tuesday, reflecting uncertainty about COVID-19 vaccines and treatments, and the next round of US coronavirus relief aid.

Delays in COVID-19 clinical trials by two major US drugmakers, plus continuing US stimulus uncertainty, sent markets down on Tuesday [FILE: Michael Nagle/Bloomberg]

Wall Street lost ground after two major drugmakers announced they were halting their COVID-19 clinical trials over safety concerns and an agreement on the next round of United States coronavirus relief aid remains up in the air.

Johnson & Johnson announced on Monday it was pausing clinical trials of a COVID-19 vaccine candidate due to an unexplained illness in a study participant. The delay weighed on the company’s shares, even after its beat-and-raise earnings report. Its shares lost 2.3 percent.

Late in the session, rival Eli Lilly and Company said it was also halting its coronavirus antibody trial because of safety concerns, sending its shares down 2.9 percent.

“We have this recent spike in coronavirus cases coinciding with big drug companies halting vaccine trials,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York. “That’s making the market nervous and in response, you’re seeing the lockdown stocks moving higher.”

All three major stock indexes closed in the red Tuesday, with Microsoft Corp shares helping to mitigate the tech-heavy Nasdaq’s loss.

Hopes for the passage of a new round of coronavirus relief aid faded as US House Speaker Nancy Pelosi rejected the White House’s $1.8 trillion relief proposal, saying President Donald Trump’s plan “falls significantly short of what this pandemic and deep recession demand”.

Senate Majority Leader Mitch McConnell said the Republican-led Senate would vote on a targeted pared-down stimulus package on Monday.

“[Washington is] playing with the market’s emotions and individuals’ financial futures,” SlateStone

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