The U.S. jobs report revealed a moderation in payroll growth in November that will aggravate fears of a more marked slowing into year-end with rising coronavirus cases, but the equity market appears to remain focused on positive vaccine development and growing hopes for more fiscal stimulus before year end. Equity index futures maintained gains and took the smaller than expected nonfarm payrolls gain in stride and the averages are higher at midday, keeping stocks on track for another week of gains.
ECONOMIC EVENTS: In the U.S., nonfarm payrolls increased 245,000 in November, which was weaker than expected. The unemployment rate dipped to 6.7% from 6.9% and has dropped from the record high of 14.7% in April. The trade deficit widened by a less than expected 1.7% to $63.1 B in October from $62.1B in September amid ongoing gains in exports and imports. Factory orders tracked estimates with a 1.0% rise in October.
Data from the Johns Hopkins Whiting School of Engineering shows there are now about 65.5M confirmed cases of COVID-19 worldwide, including 14.2M in the U.S., and 1.5M deaths due to the disease, including 277,000 in the U.S.
TOP NEWS: Moderna (MRNA) was in focus near midday after the company said last night that a letter to the editor was published in the New England Journal of Medicine, in which author Alicia T. Widge of Vaccine Research Center, NIAID, NIH and others said that the company's COVID-19 vaccine candidate, mRNA-1273, has the potential to provide "durable humoral immunity" to the virus. They also reported that, “No serious adverse events were noted in the trial, no prespecified trial-halting rules were met, and no new adverse events that were considered by the investigators to be related to the vaccine occurred after day 57.” Along with the announcement, Moderna backed its expectation of having roughly 20M doses of the vaccine available in the U.S. by the end of 2020, adding it expects to have 100M-125M doses available globally in the first quarter of 2021, with 85M-100M of those available in the U.S. and 15M-25M of those available outside the U.S. These expected first quarter doses are inclusive within the 500M-1B doses that the company expects to manufacture globally in 2021.
Ulta Beauty (ULTA) shares were 3% lower near noon after the company reported third quarter results, with same-store sales for the quarter falling 8.9% year-over-year. Of note, the company continues to expect to open at least 30 new stores in fiscal 2021, though it also expects to incur $180M-$190M in PPE and COVID-19 related operating costs. Looking ahead, Ulta guided for a Q4 same-store sales decline of 12%-14%.
In other earnings news, shares of Marvell Technology (MRVL) fell 6% after the company reported Q3 results that were largely in line with consensus estimates. The company also provided in-line earnings and revenue guidance for Q4.
MAJOR MOVERS: Among the noteworthy gainers was Sutro Biopharma (STRO), which jumped 32% after reporting "encouraging" Phase 1 data for STRO-002 in ovarian cancer. Also higher was PagerDuty (PD), which gained 25% after reporting quarterly results.
Among the notable losers was Precision BioSciences (DTIL), which declined 22% after announcing one NHL patient who was treated with PBCAR0191 and eLD died at day 42 with grade 5 sepsis in a clinical trial. Also lower was Yext (YEXT), which fell 17% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 184.44, or 0.62%, to 30,153.96, the Nasdaq was up 65.40, or 0.53%, to 12,442.58, and the S&P 500 was up 24.93, or 0.68%, to 3,691.65.
