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US STOCKS-S&P 500 slips after report on coronavirus drug trial

Published 23/04/2020, 21:19
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* U.S. weekly jobless claims fall for third straight week
* Gilead's coronavirus drug flops in first trial -FT
* Indexes: Dow +0.17%, S&P 500 -0.05%, Nasdaq -0.01%


(Updates with close of trading)
By Noel Randewich
April 23 (Reuters) - The S&P 500 ended marginally lower on
Thursday after a report that an experimental antiviral drug for
the coronavirus flopped in its first randomized clinical trial,
denting earlier optimism that the impact of the pandemic on the
labor market was nearing an end.
All three main U.S. stock indexes fell back from gains of
over 1% after the Financial Times reported that a Chinese trial
showed that Gilead Science's GILD.O remdesivir did not improve
patients' condition or reduce the pathogen's presence in the
bloodstream. Gilead said the results from the study were inconclusive as
it was terminated early.
Last Friday, Wall Street rallied in part because of a report
that COVID-19 patients in a separate study had responded
positively to remdesivir.
The market's sensitivity to news related to coronavirus
therapies reflects investors' desperation for any indication of
when the global economy might be able to start returning to
normal.
"The hope as of last week was that Gilead could take the
fear of dying off the table, which would result in a much
quicker, cleaner, faster recovery. If that's less likely today
than it was yesterday, it is perfectly reasonable for the market
to have sold off," said David Katz, chief investment officer at
Matrix Asset Advisors.
Stocks rallied earlier in the session after data that showed
weekly U.S. jobless claims fell to 4.43 million from a revised
5.24 million. However, the numbers were still staggering, taking
the total in the past five weeks to a record 26 million and
wiping out all the jobs created since the financial crisis.
"The disappointing drug news stings, but considering another
4 million people lost their jobs, the disconnect between how
well stocks have held up in the face of historically bad
economic data continues," said Ryan Detrick, senior market
strategist at LPL Financial.
Meanwhile, the U.S. Congress was preparing nearly $500
billion more in aid for small businesses and hospitals, which
was expected to clear the House of Representatives later in the
day.
The energy index .SPNY rose 3%, easily leading the 11 S&P
500 sectors as oil prices recovered in a tumultuous week that
saw U.S. crude futures crash below zero for the first time in
history. O/R
U.S. stock indexes have rallied this month on a raft of
global stimulus, but the benchmark S&P 500 remains more than 15%
below its record high as worsening economic indicators
foreshadow a deep global recession.
A survey showed U.S. business activity plumbed new record
lows in April, mirroring dire figures from Europe and Asia as
strict stay-at-home orders crushed production, supply chains and
consumer spending.
The CBOE volatility index .VIX has retreated from 12-year
peaks hit last month, but remains well above levels seen in the
past two years and analysts have warned of another sell-off as
corporate America issues worrying forecasts for the year.
The Dow Jones Industrial Average .DJI rose 0.17% to end at
23,515.26 points, while the S&P 500 .SPX lost 0.05% to finish
at 2,797.8.
The Nasdaq Composite .IXIC slipped 0.01% to 8,494.75.
Las Vegas Sands Corp LVS.N jumped 12% after the casino
operator predicted a speedy recovery in Asia on pent-up gambling
demand. Advancing issues outnumbered declining ones on the NYSE by a
1.64-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored advancers.
The S&P 500 posted six new 52-week highs and one new low;
the Nasdaq Composite recorded 36 new highs and 21 new lows.
Volume on U.S. exchanges was 11.7 billion shares, compared
with a 12.7 billion-share average over the last 20 trading days.

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