Stocks were lower to start Tuesday with the Dow falling 327 points, or 1.1%, after notching a new record close on Monday. The S&P 500 slid 0.8%, while the Nasdaq dropped 0.3%.
Amazon just jumped into the pharmacy business. Amazon Pharmacy was announced this morning and will allow customers in the U.S. to order prescription medications for home delivery, including free delivery for Amazon Prime members. “We designed Amazon Pharmacy to put customers first – bringing Amazon’s customer obsession to an industry that can be inconvenient and confusing. We wanted to make it easy for people to get their medication, understand the cost and get it delivered to the home,” said TJ Parker, Amazon’s vice president of pharmacy. Jamil Ghani, vice president of Amazon Prime, added, “We think this new benefit will add tremendous value to our members. It’s relevant as folks try to do more from the comfort and safety of their homes.” Amazon has been quietly building out its pharmacy business for several years, including acquiring PillPack in 2018. The news sent shares of CVS down nearly 8%, GoodRX shares down almost 19%, and Walgreens shares down 9.7%.
The U.S. seven-day average of new coronavirus infections surpassed 150,000 for the first time on Monday, marking the 10th straight day of at least 30% growth in that seven-day trend. California reinstitute bans on many indoor businesses on Monday, and Governor Gavin Newsom warned that he impose a curfew as cases in the state surpassed 1 million. Michigan ordered a three-week partial shutdown as cases rise there, while states including Oregon, Washington, and New Jersey tightened restrictions. “The whole country is on fire,” said Ellie Murray, assistant professor of epidemiology at the Boston University School of Public Health. “Since people can be infectious before they have symptoms, a lot of people right now are infectious and transmitting to people and don’t know it. We’re trying to get a grip on this large explosion.”
On the earnings front, Walmart delivered a third-quarter beat as costumers sent its U.S. e-commerce sales soaring by 79%. The big-box retailer reported earnings per share of $1.34 on revenue of $134.7 billion, compared to Wall Street expectations for earnings of $1.18 per share on revenue of $132.2 billion. “We’re convinced that most of the behavior change will persist beyond the pandemic and that our combination of strong stores and emerging digital capabilities will be a winning formula,” said Walmart CEO Doug McMillon. “Customers will want to be served in a variety of ways and we’re positioned to save them money, provide the variety of product choices they’re looking for, and deliver the experience they choose in the moment.” Kohl’s shares are up 9% even after it reported a 13.3% decline in quarterly net sales as shoppers shifted away from buying clothes amid the ongoing pandemic. Shares were lifted on a surprise profit of one cent per share and plans to resume its dividend payout. And Home Depot delivered a third-quarter beat as sales surged 24% year-over-year. “The third quarter was another exceptional quarter for The Home Depot as we saw the continuation of outsized demand for home improvement projects, which has led to sales growth of more than $15 billion through the first nine months of the year,” said Craig Menear, Home Depot chairman and CEO. “Our ability to effectively adapt to this high-demand environment is a testament to both the investments we have made in the business as well as our associates’ focus on customers.”
Tesla shares are up 7% at the time of writing following the announcement that it will join the S&P 500 on December 21 following months of speculation. At almost $390 billion in value and growing, Tesla would be the biggest company ever added to the benchmark, forcing the S&P Dow Jones Indices to consider doing it in stages and the committee is seeking feedback from investors on whether to add Tesla in two separate pieces. “It wasn’t easy to make such an important decision, and this decision has a big impact,” said Howard Silverblatt, senior index analyst at S&P Do Jones. “An open-ended dialog with investors will only help. You can’t put a company in at such a high level just like you would any other firm. The times have changed, the magnitude of the stocks that are being added has changed, too.”
And Airbnb finally filed its IPO prospectus late Monday with plans to go public next month. Airbnb said that its third-quarter revenue dropped 18% to $1.3 billion as the coronavirus pandemic continues to hamper demand from travelers worldwide. But its third quarter was a big improvement from the second quarter when the company said revenue plummeted 72%, the company laid off 25% of its workforce, and raised around $2 billion in high-interest debt. “Covid-19 has materially adversely affected our recent operating and financial results and is continuing to materially adversely impact our long-term operating and financial results,” the company said in its filing. “However, we believe that as the world recovers from this pandemic, Airbnb will be a vital source of economic empowerment for millions of people.”
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Inovio Pharmaceuticals Inc (NASDAQ: INO): Inovio Pharmaceuticals announced yesterday that it has received clearance from the FDA to proceed with the Phase 2 segment of its planned Phase 2/3 clinical trial for INO-4800, its COVID-19 vaccine candidate. “I am extremely proud of the INOVIO team, which has been working tirelessly to develop a safe and effective vaccine in the fight against the COVID-19 pandemic. Initiation of our Phase 2 trial marks a pivotal milestone for INO-4800,” said INOVIO’s President and CEO, Dr. J. Joseph Kim. “We are especially pleased to continue our partnership with the DoD to advance the development of INO-4800 for active duty service members and civilian personnel and are grateful for the Department’s continued confidence in our technology to combat COVID-19. INO-4800’s key differentiators are the safety and tolerability data we have observed thus far, as well as its excellent thermostability profile – making it possible to manufacture at scale and transport without frozen cold chain requirements. INO-4800 also maintains the ability to be safely re-administered and is differentiated by its ability to stimulate both CD4+ and CD8+ T cell responses.”