Stocks - Dow Cuts Gains in Wild Trading as Gilead Drug Reportedly Fails
Investing.com
Published Apr 23, 2020 04:02PM ET
By Yasin Ebrahim
Investing.com – The Dow ended at session lows Thursday, while the broader market was lower, as reports that Gilead's (NASDAQ:GILD) potential Covid-19 treatment had failed to show an improvement in patients spawned a jolt of volatility that offset energy-infused gains.
The Dow Jones Industrial Average rose 0.17%, or 39 points, while the S&P 500 and the Nasdaq Composite ended just barely in the red.
Gilead's potential antiviral drug remdesivir failed to improve the health of coronavirus patients in a clinical trial, according to draft documents published accidentally by the World Health Organization and seen by the Financial Times. Gilead fell 4.3%.
"The manuscript is undergoing peer review and we are waiting for a final version before WHO comments,” said WHO spokesperson Tarik Jasarevic.
With investor hopes running high that a potential Covid-19 therapy could smooth the reopening of the economy, the news dealt a blow to risk sentiment, forcing investors to rein in some of the bullish bets on stocks.
Wall Street had rallied earlier, led by a climb in energy prices and signs of the number of people filing for unemployment had bottomed.
The U.S. Labor Department reported that 4.427 million people filed for unemployment insurance, down 810,000 from the prior week's downwardly revised 5.237 million and down 2.44 million from the record of 6.867 million seen in late March.
"Looking at the claims data now is a lot like looking at the COVID-19 infection data. It is too early to expect a dramatic decline in the headline numbers, but to the extent that there is anything encouraging to take away from the data, there are signs of a 'flattening curve' where before there was exponential growth," Jefferies said.
The move to the downside was also exacerbated by fall in defensive concerns of the market such as utilities, real estate and consumer staples, all of which ended the day down 1%.
But gains in industrials, led by Old Dominion Freight Line (NASDAQ:ODFL) ,up 10%, Robert Half (NYSE:RHI) up 5.5% and Textron (NYSE:NYSE:TXT), up 4.4%, kept a lid on the downside in the broader market.
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