Investors had plenty to chew on Tuesday, and it showed in a down day for stocks.
The big headline out of the gate was Johnson & Johnson (JNJ, -2.3%) pausing late-stage trials for its promising COVID-19 vaccine due to an "unexplained illness," which, as we explained when AstraZeneca (AZN) was forced to do the same, isn't uncommon and doesn't necessarily spell doom for the treatment.
"JNJ decided to temporarily halt all dosing of the Covid-19 vaccine candidate due to an unexplained illness in a volunteer in the study," writes CFRA's Sel Hardy, who nonetheless maintained a Strong Buy rating on JNJ and upgraded earnings estimates after the company's strong third-quarter earnings results. "We welcome JNJ's transparency and expect to see further clarity as the issue is examined by an independent board."
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Meanwhile, stimulus talks remained muddy; Senate Majority Leader Mitch McConnell said his chamber would vote on a bill centered around the Paycheck Protection Program (PPP) sometime this month, though it's uncertain whether it would get past the House.
Apple (AAPL, -2.7%) gave up a little of its recent gains after it unveiled a suite of four new iPhones, including an iPhone 12 Mini with a 5.4-inch screen. And JPMorgan Chase (JPM, -1.6%), which kicked off the Q3 earnings calendar by beating expectations, still slumped as CEO Jamie Dimon warned more stimulus is needed to help the economy.
The Dow Jones Industrial Average slipped 0.6% to 28,679.
Other action in the stock market today:
- The Nasdaq Composite managed a mere 0.1% decline to 11,863.
- The S&P 500 fell 0.6% to 3,511.
- The small-cap Russell 2000 lost 0.7% to 1,636.
COVID Treatments' Push and Pull on Wall Street
The broader market results don't indicate much fallout from today's disappointing COVID-19 news, which also included a halt to Eli Lilly's (LLY, -2.9%) antibody treatment.
But take a closer look: Industrials, real estate, banks and energy, which rely heavily on robust economic activity, were solidly lower today. However, technology and communications once again showed relative strength as they have all year, bolstering the fortunes of technology funds such as these 15 products, and that should continue to be the case as long as effective treatments and vaccines remain elusive.
The same goes for the Invesco QQQ Trust (QQQ), which invests in the index composed of the Nasdaq's 100 largest financials and has raked in billions in assets this year, prompting Invesco to launch even more funds tied to the index. (You can read about a host of Nasdaq-100 products here.)
At some point, however, a vaccine or treatment will finally get the green light, and while it might take months to reach most of America's population, most experts expect that to "flip the switch" for a host of battered industries. Here, we look at 11 stocks to buy that are in rough shape right now, but that could pivot in a heartbeat when a game-changing medical breakthrough is announced.
Kyle Woodley was long AAPL and QQQ as of this writing.
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