Wall Street Opens Mixed as J&J Drug Blow Weighs; Dow Down 60 Points

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Investing.com — U.S. stock markets opened mixed on Tuesday, as problems with another Covid-19 drug trial dented sentiment toward cyclicals, while the first bank earnings of the quarter both pointed to a slowdown in consumer spending.

By 9:35 AM ET (1335 GMT), the Dow Jones Industrial Average was down 57 points, or 0.2%, at 28,781 points. The S&P 500 was down 0.1% and the Nasdaq Composite was up 0.1%, with megacaps Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) supporting as the two giants prepare for their biggest marketing events of the year later. 

Apple stock fell 1.8% after its biggest one-day gain in months on Monday, while Amazon stock was down 0.3%, after rising over 10% in the last week. 

Earlier, JPMorgan (NYSE:JPM) had reported much better-than-expected results for the third quarter, as its provisions against credit losses fell to only $611 million from $8.9 billion three months earlier, a suggestion that the worst has already been priced in, as regards the fate of the bank’s loan book. JPMorgan stock still fell 0.5%, as investors zeroed in on falling revenue, especially at its consumer division, where revenue fell 9%. Similar concerns also hit Citigroup (NYSE:C) stock, which fell 1.2% after the bank reported a 34% drop in profit for the quarter.

There was little reaction earlier to figures showing U.S. consumer inflation still running below 2.0%, both in headline and in underlying terms. 

Sentiment had been hurt overnight by the news that Johnson & Johnson had paused its stage 3 trial of its experimental drug for treating Covid-19, due to an unexplained illness in one of the study participants. It’s the second of the more promising experimental drugs to experence such a setback, after the AstraZeneca-Oxford University drug trial was halted over a month ago. While AstraZeneca (NYSE:AZN)’s trial has resumed in many countries, it’s still on hold in the U.S.

The trial news overshadowed an otherwise positive quarterly update from J&J, where sales rose 2% on the back of an improved performance from its medical devices unit. J&J stock fell 1.3%.

Elsewhere, Exxon Mobil (NYSE:XOM) stock – which has been one of the worst performers in the DJI over the last quarter – outperformed slightly, losing only 0.1% after Goldman Sachs (NYSE:GS) analysts upgraded it to ‘neutral’ from ‘underweight’. 

Crude Oil futures prices were even more buoyant, rising 2.0% in the U.S. after the International Energy Agency predicted a strong rebound in world energy demand next year, even though it pulled forward the date when it expects world oil demand to peak.