Stocks Swing To Loss As COVID-19 Surge Hits Optimism

European shares have followed Wall Street into the red this morning as a worrying rise in COVID cases sees jittery investors sell off stocks. Hot off the heels of the positive news that Pfizer’s (PFE) vaccine was up to 95% efficacy, the US death count hitting the milestone 250,000 mark caused markets to slide. This shows how delicately poised markets are and that news of a vaccine is not sufficient, approval and vaccinations being rolled out is what will make the real difference.

US markets opened higher yesterday and stayed that way until lunchtime, before selling off sharply in the afternoon. The daily US death toll hit its highest level in six months on Tuesday and the daily new case count is running above the 150,000 mark. That is around a quarter of the global total daily new cases. The Dow Jones Industrial Average and S&P 500 both closed the day 1.2% lower. In the S&P, the energy sector fell hardest, losing 2.9% overall.

In corporate news, Boeing’s 737 Max airliner – which has been grounded for more than a year after two fatal crashes – cleared a crucial hurdle to be allowed to return to the skies. The plane was cleared to fly in the US by the FAA, although that clearance does not extend internationally and changes to the planes will be required before they can be flown with passengers. Pilots will be required to complete additional training, and the FAA has to inspect each individual plane. The approval news wasn’t enough to lift Boeing (BA) stock, which followed the pattern of the broader market on Wednesday and closed 3.2% lower.

Lowe’s stock sinks despite firm doubling online sales

At the bottom of the S&P 500 yesterday were home improvement supplies firm Lowe’s (LOW), Norwegian Cruise Line (NCL) and energy company Phillips 66 (PSX). Lowe’s stock slumped by more than 8%, despite reporting a doubling in online sales, it marginally missed earnings expectations in its Wednesday quarterly earnings update. Oppenheimer analyst Brian Nagel told CNBC that the market is less interested in online sales gains than the broader question of what is next for the company once the COVID-19 crisis comes to a close and elevated home improvement demand subsides.

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