The major averages are mixed at midday in a cautious trading session, with the Dow and S&P 500 weaker and the Nasdaq slightly higher. A continued stalemate on additional U.S. stimulus remains a headwind, while vaccine optimism faced a setback following news from J&J that it had paused its own studies due to an "unexplained illness."
ECONOMIC EVENTS: In the U.S., the headline and core Consumer Price Index rose 0.2% in September, as expected.
TOP NEWS: Shares of Johnson & Johnson (JNJ) are 2% lower near noon after the company said last night that it has temporarily paused further dosing in all its COVID-19 vaccine candidate clinical trials, including the Phase 3 ENSEMBLE trial, due to an unexplained illness in a study participant. The COVID news largely overshadowed the company's earnings and revenue beat in the third quarter, which it said was "powered by better-than-expected procedure recovery in Medical Devices, growth in Consumer Health, and continued strength in Pharmaceuticals."
Meanwhile, earnings season also began for the big banks, with JPMorgan (JPM) and Citi (C) each reporting better than expected headline earnings. Jamie Dimon, JPMorgan's Chairman and CEO, noted that the bank "maintained our credit reserves at $34 billion given significant economic uncertainty and a broad range of potential outcomes." Meanwhile, Citi CEO Michael Corbat said his bank continues to "navigate the effects of the COVID-19 pandemic extremely well."
In other earnings news, Delta Air Lines (DAL) reported worse than expected losses and lower than expected adjusted revenue for the third quarter as customers continue to avoid flying amid the pandemic. Glen Hauenstein, Delta's president, said: "While it may be two years or more until we see a normalized revenue environment, by restoring customer confidence in travel and building customer loyalty now, we are creating the foundation for sustainable future revenue growth."
Disney (DIS) shares have jumped 4% after the company announced a strategic reorganization of its media and entertainment businesses to focus on developing and producing original content for the company's streaming services. Loop Capital analyst Alan Gould, who upgraded Disney to Buy from Hold, said that the "magnitude of reorganization" sends a "strong signal" of how urgently the management is prioritizing streaming. Meanwhile, Morgan Stanley analyst Benjamin Swinburne said that, if successful, this new approach should "significantly accelerate" Disney's transition to DTC streaming from traditional media and the "media industry may never look the same."
MAJOR MOVERS: Among the noteworthy gainers was Ethan Allen (ETH), which rose 13% after guiding Q1 above expectations. Also higher was BlackRock (BLK), which gained 5% after reporting quarterly results.
Among the notable losers was Loop Industries (LOOP), which fell 32% after Hindenburg Research published a short report, stating it sees "see 100% downside" for the stock. Also lower was Fastenal (FAST), which declined 4% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 139.55, or 0.48%, to 28,697.97, the Nasdaq was up 20.81, or 0.18%, to 11,897.07, and the S&P 500 was down 15.17, or 0.43%, to 3,519.05.
