US Market sinks on fear of another coronavirus lockdown

The US stock market settled volatile session lower on Monday, 13 July 2020, as investors pocketed recent gains late afternoon amid rekindled worries about another coronavirus lockdown. An increase in tensions with China also damaged sentiment. However, market losses were capped on more upbeat news regarding a potential coronavirus vaccine.

At closing bell, the Dow Jones Industrial Average rose 10.50 points, or 0.04%, to 26,085.80. The S&P 500 index fell 29.82 points, or 0.94%, to 3,155.22. The tech-heavy Nasdaq Composite Index dropped 226.60 points, or 2.13%, to 10,390.84.

The Wall Street commenced trading with firm footing today as traders reacted positively to more upbeat news regarding a potential coronavirus vaccine and an upbeat start to the second-quarter earnings season by PepsiCo.

 

Pfizer (PFE) and BioNTech (BNTX) announced that two of the companies' four investigational vaccine candidates received Fast Track designation from the U.S. Food and Drug Administration. The companies said they expect to start the next phase of trials as soon as later this month and are anticipating enrolling up to 30,000 subjects. If the ongoing studies are successful and the vaccine receives regulatory approval, Pfizer and BioNTech expect to manufacture up to 100 million doses by the end of 2020 and potentially more than 1.2 billion doses by the end of 2021.

Merger news also perked up investors as chipmaker Analog Devices Inc announced a $21 billion deal to buy rival Maxim Integrated Products Inc.

But, the market failed to hold early momentum as profit booking induced selloff triggered during afternoon after California Governor Gavin Newsom rolled back the state's reopening following a recent spike in coronavirus cases. Newsom ordered a statewide closure of all indoor operations at restaurants, bars, movie theaters, zoos and museums, with other businesses like gyms and hair salons being required to close their doors in counties on the state's watch list. With a recent jump in cases in the United States that has made Florida, Arizona, Texas and California the new epicenters.

Traders were awaiting reports this week from a slew of companies that have yet to provide concrete guidance on the impact of the virus.

Shares of PepsiCo Inc. rose after the snack-maker reported stronger-than-expected second-quarter sales. PepsiCo Inc said it benefited from a surge in at-home consumption of salty snacks such as Fritos and Cheetos during lockdowns.

Shares of German biotech firm BioNTech jumped over 10.6% and Pfizer climbed 4.1% as two of their experimental coronavirus vaccines received the US FDA's "fast track" designation.

Among Indian ADR, Vedanta climbed up 0.34% to $5.95, Wipro climbed 0.89% to $3.39, WNS Holdings added 0.67% to $55.27, and INFOSYS rose 0.77% to $10.47, while Tata Motors dropped 3.54% to $7.09, HDFC Bank shed 2.83% to $47.02, ICICI Bank sank 2.98% to $9.43, and Dr Reddys Labs was down 1.19% to $51.39.

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