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Johnson & Johnson fell 3.56% as one of the biggest weights on
both the Dow and S&P500 after the drugmaker said its single-dose
vaccine was 72% effective in preventing COVID-19 in the United
States, with a lower rate of 66% observed globally.
The results compare to the high bar set by two authorized
vaccines from Pfizer Inc/BioNTech SE and Moderna Inc, which were
around 95% effective in preventing symptomatic illness in key
trials when given in two doses. Moderna shares climbed 8.53%
while Pfizer shares edged up 0.11%.
Worries of a short squeeze that began earlier in the week
resurfaced after an army of retail investors returned to trade
shares in stocks such as GameStop Corp and Koss Corp, which shot
higher after brokers including Robinhood eased some of the
restrictions they had placed on trading.
"The overall picture is that if there is any bad news that
suggests or indicates there could be a longer hibernation period
for us to be indoors and not consuming or spending that tends to
set the market back and a lot of people sit on the sidelines,
particularly with that news," said Sylvia Jablonski, chief
investment officer at Defiance ETFs in New York.
"And then what is going on with (Gamestop) and all that stuff,
people are a little afraid to trade."
The surge in volatility has led to a huge increase in volume,
totaling over 20 billion shares in each of the past two sessions
across U.S. exchanges for the most active trading days on record
going back to 2014, according to Refinitiv data.
Volume across U.S. exchanges on Friday was 17.13 billion shares,
compared with the 15.26 billion average for the full session
over the last 20 trading days.
The U.S. Securities and Exchange Commission said it was closely
monitoring any potential wrongdoing, to both brokerages and
social media traders.
The Dow Jones Industrial Average fell 620.74 points, or 2.03%,
to 29,982.62, the S&P 500 lost 73.14 points, or 1.93%, to
3,714.24 and the Nasdaq Composite dropped 266.46 points, or 2%,
to 13,070.70.
All three main indexes suffered their biggest weekly fall since
the end of October, as the Dow lost 3.28%, the S&P fell 3.31%
and the Nasdaq declined 3.49%. For the month, the Dow dipped
2.04%, the S&P shed 1.12% and the Nasdaq gained 1.42%.
Both the S&P and Dow closed below their 50-day moving average,
seen as a technical support level.
Market participants have speculated that volatility caused by
the short squeezes have led to investor favorites including
Apple Inc coming under pressure as hedge funds sell to cover
billions of dollars in losses.
Apple shares declined 3.74% while Microsoft fell 2.92%.
Still, while concerns about rising COVID-19 cases and bumpy
vaccine rollouts kept investors leery about a pullback and an
increase in volatility in the near-term, the start to quarterly
earnings has eased some concern about stretched stock
valuations.
Of the 184 companies in the S&P 500 that have reported earnings
through Friday morning, 84.2% have topped analyst expectations,
well above the 75.5% beat rate for the past four quarters,
according to Refinitiv data.
Honeywell International lost 3.68% after it posted a 13% fall in
quarterly profit.
The first known U.S. cases of the South African COVID-19
variant, found to be partly resistant to current vaccines and
antibody treatments, was detected in South Carolina on Thursday.
Data showed U.S. labor costs rose more than expected in the
fourth quarter amid a jump in wages, supporting views that
inflation could accelerate this year, while another report
showed U.S. consumer spending fell for a second straight month
in December.
Declining issues outnumbered advancing ones on the NYSE by a
2.88-to-1 ratio; on Nasdaq, a 2.38-to-1 ratio favored decliners.
The S&P 500 posted 7 new 52-week highs and no new lows; the
Nasdaq Composite recorded 64 new highs and 16 new lows.
(Reporting by Chuck Mikolajczak; editing by Diane Craft)
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