U.S. stocks ended mostly mixed on May 22, as investors tried to fathom the extent of U.S.-China tensions that rose earlier in the week. Economic recovery from the ongoing coronavirus pandemic also threw investors in frenzy, as they tried to speculate how fast it might be. However, there was also positive news regarding the coronavirus vaccine trials that boosted investors’ spirit. U.S. stock exchanges were closed on Monday for the Memorial Day holiday.
The Dow Jones Industrial Average closed at 24,465.16 after declining0.04%, the broader S&P 500 reached 2,955.45 after increasing0.2% and the tech-laden Nasdaq Composite hit 9,324.59after inching0.4%higher.
The fear-gauge CBOE Volatility Index (VIX) declined 0.7% to close at 27.97on May22.
Trump Warns of U.S. Action to China’s National Security Law on Hong Kong
Tensions between the United States and China rose further on Friday after President Donald Trump warned of addressing the issue “very strongly” if China plannedto increase its control on Hong Kong.
The president told reporters on Thursday that “nobody knew yet” the details of China’s plan. Trump’s statement came after news broke of China’s plans to impose new national security legislation on Hong Kong after the pro-democracy unrest last year.
China’s actions in the region could lead to fresh protests in Hong Kong, especially after the violent displays of unrest by the region last year. In 2019, Trump approved the “Hong Kong Human Rights and Democracy Act” that requires the State Department to certify at least once a year that Hong Kong maintains enough autonomy to receive favorable trading terms with the United States.
Fauci Optimistic over Moderna’s Vaccine Trails
Dr. Anthony Fauci, the country’s leading infectious disease expert, expressed his optimism on Friday over the initial results from a coronavirus vaccine trial.
The phase one trial of the vaccine under development by the Massachusetts-based biotechnology company Moderna, Inc. MRNA in collaboration with the National Institute of Allergy and Infectious Diseases is “really quite promising”, Fauci said after he looked at the data.
Last week, Moderna announced that the vaccine appeared to be safe and was able to stimulate an immune response against the deadly coronavirus. The vaccine produced neutralizing antibodies, which actively blocked the virus.Fauci also said that “we could have a vaccine that we could be beginning to deploy at the end of this calendar” or January 2021.
For the week ended May 22, all the three major benchmarks were up. The Dow rose 3.29% to post its best weekly performance since Apr 9. The S&P 500 and Nasdaq also moved3.2% and 3.4% higher respectively to mark their strong gains. A major push for the stocks in the week came from the prospect of a coronavirus vaccine and the United States reopening its economy. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks That Made Headlines
UBS Group to Brave Coronavirus Impact with Restructuring
Amid the coronavirus pandemic, Swiss Bank — UBS Group AG UBS — continues with restructuring activities. (Read more)
Hertz Global Files for Bankruptcy Due to Coronavirus Crisis
Hertz Global Holdings HTZ recently filed for bankruptcy as its business is being crippled by the coronavirus-induced waning demand for rental hire services with most people staying indoors. (Read more)
LATAM Airlines Files Chapter 11 Bankruptcy Amid Coronavirus Woes
LATAM Airlines Group LTM filed for Chapter 11 bankruptcy protection in the United States as it grapples with a dramatic drop in air travel demand amid coronavirus concerns. (Read more)
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