Wall Street sees sluggish start despite vaccine news

Hopes of a surge on Wall Street following new vaccine news from Pfizer appear to have been overstated, with the main indices making a somewhat subdued start on Wednesday morning.

Shortly after the opening bell, the Dow Jones Industrial Average rose 0.14% to 29,825, while the S&P 500 was mostly flat at 3,609 and the Nasdaq was up just 0.08% at 11,909.

The positivity around the vaccine may have been overtaken by continually surging cases of coronavirus in the US, which yesterday passed the 11 million mark as more states brought in stricter lockdown measures.

Investors may also be getting fatigued by the rollercoaster of events in the last few weeks, with the second wave of the pandemic, the US election and vaccine euphoria all rocking markets one after another.

However, one winner in early trading in New York was aircraft maker Boeing Co (NYSE:BA), which rose 3.4% to US$217 after its troubled 737 MAX aircraft was approved to fly again by US regulators.

7.50am: Wall Street seen higher

Wall Street indices are expected to open higher on Wednesday after Pfizer (NYSE:PFE) announced it will seek emergency use authorization in the US for the COVID-19 vaccine developed with BioNTech.

The pair were waiting to gather all safety data before submitting it to the US Food and Drug Administration.

Following the final analysis of results, the companies decided to stop the phase 3 trial after the inoculation proved effective in 95% of cases.

While such positive developments help to lift the markets, they aren’t enough to erase the current level of infections and the consequent lockdowns.

“In the immediate future, a lot of good news has been priced in very quickly and there may be a small void over the next couple of weeks that allows for a bit of a corrective move,” said Craig Erlam, senior market analyst at OANDA Europe.

“With Covid cases surging around the world, this could be the catalyst if lockdowns don’t quickly bring the numbers back under control. This lockdown is very different to the last and that may have a significant impact on the success of it.”

Five things to watch for on Wednesday:

• Notable earnings figures today include graphics card maker Nvidia Corp (NASDAQ:NVDA), which will post numbers for its third quarter
• Another company likely to elicit interest will be retailer Lowe’s Companies Inc (NYSE:LOW), which is scheduled to deliver third quarter earnings
• Share price reaction will also be eyed from pharma giant Pfizer Inc (NYSE:PFE) after the company said its coronavirus vaccine developed with BioNTech was 95% effective in the final results from a pivotal study
• Retail giant Target Corp (NYSE:TGT) will also eyed after the company beat expectations in its third quarter results
• There is little in the macro calendar, however, some investors may keep an eye on new US building permits for October, which are expected to rise to 1.56mln from 1.54mln in September

Story by ProactiveInvestors