S&P 500 News: Tesla profits allow it to join index, US to buy up to 600 million doses of coronavirus vaccine, Microsoft profits eclipsed
the S&P 500 Index (SNPINDEX: ^ GSPC) kept his winning streak alive, closing up 18.7 points, or 0.57%, on July 22. This is the seventh consecutive day of the index, which represents about 80% of the market capitalization of all US stocks, closed higher.
The announcement that the U.S. federal government has reached an agreement with Pfizer (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) pay $ 1.95 billion for 100 million doses of the coronavirus vaccine jointly developed by the two companies, if it obtains regulatory approval. Pfizer stock gained 5.2% on announcement, while the smaller BioNTech stock jumped nearly 14% to the day.
The news boosted big gains through other health care and related stocks. Well tower (NYSE: GOOD), Ventas (NYSE: VTR), and Properties of Healthpeak (NYSE: PIC), REITs – real estate investment trusts – specializing in health care and senior housing, stocks gained more than 4%. Hospital operator HCA Health (NYSE: HCA) posted profit this morning, beating expectations and pushing its stock up 12%.
Today’s biggest news related to the S&P 500 came after the bell and came from a company that isn’t even in the index – or at least not Again: You’re here (NASDAQ: TSLA). But after reporting a second quarter profit of $ 104 million, that is now set to change.
US government signs another coronavirus vaccine deal
Some details about today’s agreement between Pfizer / BioNTech and the federal government: For $ 1.95 billion, the two partners will provide 100 million doses to the US Health and Human Services and the Department of Defense. Departments also have the option of purchasing up to 500 million additional doses, depending on FDA approval for a coronavirus vaccine candidate from the BNT162 program. According to recent data, there are two drug candidates in the program, and both have received expedited designation by the FDA.
The vaccine candidate designated BNT162b1 is on track to begin phase 2b / 3 clinical trials by the end of this month and is expected to recruit up to 30,000 participants.
It is one of several agreements the government has entered into as part of “Operation Warp Speed” to fund the accelerated development of a vaccine against the coronavirus. Previous deals worth nearly $ 3 billion with other drug companies aim to both secure hundreds of millions of doses of a successful vaccine and fund development.
While a typical vaccine development takes several years due to the need for long-term human studies to prevent potential long-term adverse effects, the FDA is expected to issue an authorization for the use of emergency for any coronavirus vaccine candidate that is shown to be effective and safe much earlier in trials than usual.
Health stocks on the rise
Vaccine news is helping to boost the actions of other healthcare companies that deal with some of the most-at-risk populations. Welltower, Ventas and Healthpeak all own senior housing and nursing homes, and the elderly have been by far the demographic group hardest hit by COVID-19. The outlook for an accelerated vaccine, with the Department of Health and Human Services taking a large number of doses, offers an indication that the government plans to ensure that at-risk groups, including doctors, nurses, first responders and the elderly have priority access.
Home builders roar over high demand
Builder NVR (NYSE: NVR) today released its second quarter results. Both revenue and profits are down 10% and 22% from a year ago, not surprisingly with door-to-door orders but the closure of construction and sales activities at the start of the quarter. But even with the negative events that saw order cancellations increase, the company said new home orders rose 13% in the quarter. Investors bought on the positive numbers for continued strong demand, pushing stocks up 10% on the day.
Microsoft’s antitrust complaints eclipse strong profits
The tech giant’s cloud computing business continues to experience massive growth. Azure revenue increased 47%, increasing total revenue by 13% and generating earnings of $ 1.46 per share, well above expectations of $ 1.36 per share .
But the relatively good report has not received as much favorable attention as the negative implications of a complaint filed with the European Commission by a competitor. Slack Technologies (NYSE: WORK). In short, Slack alleges that by bundling Teams with its Office suite, Microsoft is unfairly using its scale to force users to install Teams and not allow its removal.
While this sounds familiar to some readers, it’s not that different from previous antitrust complaints about Microsoft’s bundling of its web browser, Internet Explorer, with Windows in the past.
Tesla is about to crush the S&P 500 party
With $ 104 million in net income, Tesla was able to tick the last box to be eligible for the S&P 500. The maker of automobiles, batteries and solar components has made a profit in four consecutive quarters and is expected to enter the market. ‘index. quickly accordingly. And it wasn’t just a profitable quarter due to a few accounting changes: Tesla generated strong free cash flow of $ 418 million and ended the quarter with $ 8.6 billion in cash and cash equivalents.
Next step for Tesla: start its second Gigafactory in the United States, continue to scale up production in Asia, and see what happens when index funds with more than $ 1 trillion under management must add Tesla shares to their top 15 holdings.
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