Dow rises after a Covid-19 vaccine trial shows promise: July 15, 2020

By CNN Business

Updated 7:59 a.m. ET, July 16, 2020
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12:59 p.m. ET, July 15, 2020

Are we in the beginning of a new downturn? Well...

From CNN Business' David Goldman

This recession is full of contradictions. We're in a recovery, but still in a recession. The stock market is bouncing back strongly, but markets remain super volatile.

But if we take the broader look? We start to see that the bounce back is leveling off. Just a bit.

"It may be two steps forward, one step back along the way," said Lakshman Achuthan, co-founder of the Economic Cycle Research Institute, on CNN Business' "Markets Now" live show.

He noted the quick snapback in the jobs report may not remain as strong and long lasting as economists had hoped. Leading economic indexes continue to point to the upside --they're not showing a fresh slowdown -- but, he noted "There's a lot of 'on the one hand / on the other hand' going on."

"As deep and bad as this recession has been, it was going to be relatively short-lived," Achuthan said. "But we have to be on guard. ... What happened in this recession was literally off the charts."

12:20 p.m. ET, July 15, 2020

Rally fizzles as Nasdaq turns negative

From CNN Business' David Goldman

Tech might have flown a bit too close to the sun lately. An emerging tech Cold War between China and the United States isn't exactly good news for American technology companies.

Big Tech declines led the Nasdaq, a trailer all day, into slightly negative territory by midday. The broader stock market remained positive, with the Dow up about 100 points and the S&P 500 index 0.4% higher.

Amazon was the biggest laggard today, falling 2.6%. Ebay, its smaller ecommerce rival, fell 2.5% and Nvidia was down 2.4%. Netflix also fell 2%, joining Wednesday's biggest loser club.

11:28 a.m. ET, July 15, 2020

And now, for a look at the traffic and weather...

From CNN Business' David Goldman

It was looking earlier today like stocks were going to soar, but we'll settle for this.

The Dow is up around 200 points as we approach midday, and the S&P 500 is 0.7% higher. The Nasdaq is trailing, up only 0.1%.

Two big factors -- Moderna's promising Covid-19 vaccine trial, and Goldman Sachs' way-better-than-expected earnings report -- are pushing stocks higher. But, you know, it's hard to get too excited about anything these days, and investor enthusiasm is significantly more muted at the moment than it was earlier this morning.

11:34 a.m. ET, July 15, 2020

Burberry sales sink 45%

From CNN Business' Jordan Valinsky

Burberry (BURBY) had a dismal first quarter. The luxury retailer said same-store sales sank 45% as business was "severely impacted by the drop in luxury demand from Covid-19."

The company expects demand to improve slightly this summer, with sales falling 15% to 20%. Burberry didn't release full-year guidance because of uncertainties caused by the virus.

"The second half, and the course of the pandemic from here, will largely depend on the actions governments pursue to control the spread of the virus as economies restart, including their responses to second viral waves, as well as the phasing of store re-openings, an easing of travel restrictions, and the on-going consumer response," Burberry said in a statement.

Shares dropped more than 5% in early trading.

10:23 a.m. ET, July 15, 2020

Airline stocks soar on Covid-19 vaccine hopes

From CNN Business' Chris Isidore

US airline stocks were all up 6% or more in early trading, significantly outpacing broader market gains, after Moderna reported "promising" results in a Phase 1 Covid-19 vaccine study.

The pandemic-fueled plunge in air travel demand has led to massive losses and sharply lower stock prices across the industry.

Delta Air Lines reported a $5.7 billion net loss Tuesday and a drop in bookings, as Covid cases rise in the US South and Northeastern states put limits on travels. Other airlines are expected to post multi-billion-dollar losses when they report results next week.

But shares were sharply higher at all US airlines -- both the major carriers such as Delta, American, United and Southwest, and smaller carriers including Alaska, JetBlue, Spirit and Allegiant.

10:18 a.m. ET, July 15, 2020

Goldman Sachs boss: We're preparing for 'prolonged' economic challenges

From CNN Business' Matt Egan

Goldman Sachs isn't letting its blockbuster earnings nor booming markets get to its head.

David Solomon, the CEO of Goldman Sachs (GS), told analysts Wednesday the company is not banking on a speedy recovery from the collapse.

"We continue to prepare for prolonged economic challenges and look beyond market valuations," Solomon said.

The good news is that Goldman's economic forecasts have improved. The bank is now expecting a US GDP contraction of 4.6% in 2020, compared with 6.2% back in April.

But the bad news is that Goldman's global GDP forecast has darkened, with a drop of 3.4% now anticipated.

The biggest risk remains the pandemic, which has forced California, Texas and New Mexico and other states to reimpose health restrictions.

"We are navigating an uncertain macroeconomic backdrop brought on by an extraordinary global health crisis," Solomon said. "The path to reopening in many US states and corresponding economic consequences remain unclear."

9:45 a.m. ET, July 15, 2020

BlackRock windfall masks underlying losses at PNC because of the pandemic

From CNN Business' Matt Egan

PNC's profits more than doubled during the second quarter -- but the super-regional bank's numbers look weaker under the hood.

PNC (PNC) reported a net income of $3.7 billion, up from just $1.4 billion a year ago. Yet that profit surge was driven by the sale of a 22% stake in asset management behemoth BlackRock (BLK) -- a lucrative deal that created an after-tax gain of $4.3 billion.

If that BlackRock windfall is excluded, PNC actually lost money because of the health crisis. The bank posted a loss of $744 million from continuing operations, compared with a profit of $1.2 billion a year ago.

PNC blamed "uncertainty in the economy related to the pandemic" that caused a $2.5 billion surge in provisions for bad loans, up from $914 million during the first quarter.

Revenue dropped 6% to $4.1 billion, narrowly missing estimates.

PNC's shares climbed 2% Wednesday, trimming its 2020 loss to 35%.

9:33 a.m. ET, July 15, 2020

Dow rises sharply on vaccine results and Goldman earnings

From CNN Business' Matt Egan

US stocks soared once again at Wednesday’s opening bell.

The Dow opened up 350 points after a Moderna coronavirus vaccine showed promising results. Moderna shares surged 14%.

The S&P 500 was up 1%, and the Nasdaq rose 0.7%.

The vaccine hopes sent travel companies like Delta Air Lines and Carnival sharply higher. Goldman Sachs is rallying 4% on near-record revenue driven by robust trading and investment banking results.

US stocks finished sharply higher Tuesday, with the Dow spiking 557 points, or 2.1%.

9:34 a.m. ET, July 15, 2020

Moderna stock surges 14% after promising Covid-19 vaccine trial

From CNN Business' David Goldman

Moderna, a biotech company, had some much-needed good news to share about coronavirus: Its vaccine candidate has been found to induce immune responses in all of the volunteers who received it in a Phase 1 study.

The stock surged 14% in early trading, and the stock market soared, too.

These early results, published in the New England Journal of Medicine on Tuesday, showed that the vaccine worked to trigger an immune response with mild side effects -- fatigue, chills, headache, muscle pain, pain at the injection site -- becoming the first US vaccine candidate to publish results in a peer-reviewed medical journal.

The vaccine is expected to begin later this month a large Phase 3 trial -- the final trial stage before regulators consider whether to make the vaccine available.