By Geoffrey Smith
Investing.com — U.S. stock markets opened mostly lower again Wednesday, with cyclical and reopening stocks underperforming amid fear that the delta variant of the Covid-19 coronavirus could yet derail the global economic recovery.
A sharp drop in housing starts in July, pointing to a further cooling off of the housing market under price and supply chain pressures, also hurt the mood, although building permits recovered after falling in June.
“The signal from the fall in sales is unambiguous,” said Pantheon Macroeconomics Ian Shepherdson. “Both permits and starts are likely to fall over the next few months. Housing demand has reverted to its pre-Covid level, so construction activity needs to drop further.”
By 9:40 AM ET (1340 GMT), the was down 147 points, or 0.4% at 35196 points. The was down 0.2% and the outperformed, staying roughly unchanged.
Lowe’s Companies (NYSE:) stock was the standout performer among blue chips in early trade, rising 7.0% after the retailer raised its forecast for the year on the back of a strong second quarter. While revenue from amateur home improvement items weakened as expected, it was more than offset by increased buying from business customers, notably on big-ticket tools. By contrast, Target (NYSE:) stock fell even though the retailer beat expectations for profit and announced a new buyback program.
Virpax Pharmaceuticals (NASDAQ:) continued its stellar rise, leaping another 85% after the Food and Drug Administration sent it a written response concerning an experimental drug aimed at creating antiviral barriers. The FDA’s pre-investigational new drug response “provides an opportunity for open communication between the Sponsor and the FDA to discuss the IND development plan and to obtain the FDA’s guidance for clinical studies for the new drug candidate,” according to Anthony Mack, chairman and CEO of Virpax, which listed earlier this year.
Elsewhere, Tencent (HK:) Holdings (OTC:) ADRs rebounded 3.5% on the back of better-than-expected quarterly earnings, having hit a 15-month low on Tuesday. The stock has still lost 43% from its peak earlier this year under the weight of a regulatory onslaught against its services, which continued on Wednesday as state authorities accused its WeChat messaging service of making illegal data transfers (along with over 40 other apps).
Pfizer (NYSE:) stock rose 1.4% to a new all-time high amid reports that the U.S. will approve ‘booster shots’ for those already fully vaccinated, paving the way for a long-lasting boost to revenue from its Covid-19 vaccine.
ViacomCBS (NASDAQ:) stock meanwhile, rose 4.7% after the broadcaster said it will roll out a new subscription streaming service, Sky Showtime, in 20 European markets from next year. The project is a joint venture with Comcast (NASDAQ:) whose stock fell 0.1%.
Attention is likely to switch later in the day to the release of the minutes from the Federal Reserve’s last policy meeting, a release that will be scanned for early hints of a tightening of monetary policy that many expect to be flagged more clearly by Chairman Jerome Powell at the Fed’s symposium in Jackson Hole next week. The release is due at 2:00 PM ET (1800 GMT).
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