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Dow tumbles 510 points amid bombshell bank report, virus fears

NYSE Trader worried red
  • Stocks fell on Monday lower amid fears of a COVID-19 resurgence and the publication of an investigative report on large banks.
  • Major indexes pared losses in late trading. The Dow Jones industrial average slid 510 points after plummeting as much as 942 points earlier in the session.
  • Healthcare stocks were among the biggest decliners following the death of Supreme Court Justice Ruth Bader Ginsburg. Investors are sizing up the impact it could have on the Affordable Care Act.
  • Heightened political uncertainty has raised doubts about another round of stimulus before the November presidential election.
  • Watch major indexes update live here.

US stocks tumbled on Monday as investors grappled with a range of headwinds including rising COVID-19 cases, a possible "mini lockdown" in the UK, and allegations of money laundering at big-name banks.

Major indexes pared losses in late trading. The Dow Jones industrial average slid 510 points after plummeting as much as 942 points earlier in the day.

Political uncertainty continues to be front and center for investors ahead of the presidential election in November and is heightened following the death of Supreme Court Justice Ruth Bader Ginsburg on Friday.

Here's where US indexes stood at the 4 p.m. ET market close on Monday:

Read more: Tony Greer made 5 times his money with an early investment in Apple. The macro investor and ex-Goldman Sachs trader provides an inside look into his trading tactics and shares his top 3 ideas right now.

Reports from the UK suggested that another lockdown there due to rising COVID-19 cases is not out of the question as Prime Minister Boris Johnson considers it as a "circuit breaker" for the virus.

Bank of America, Wells Fargo, Citigroup, JPMorgan, and other bank stocks traded sharply lower on Monday following a BuzzFeed News report that exposed $2 trillion in suspicious transactions and allegations that banks enabled money laundering by criminal networks.

Read more: GOLDMAN SACHS: Buy these 21 stocks on track for years of market-beating growth that could make them future giants — even rivals to the FAANGs

Healthcare stocks also sold off on Monday as investors weighed the potential that a conservative-leaning Supreme Court could strike down the Affordable Care Act. UBS provided insight into what the healthcare sector could face in the wake of Ginsburg's death.

The roller-coaster ride in Nikola continued on Monday as shares plummeted following an announcement that Trevor Milton stepped down as executive chairman.

ByteDance, the owner of TikTok, is seeking a valuation of its popular social-media app of as much as $60 billion, according to Bloomberg.

Read more: Morgan Stanley wealth management's head of market research told us a risk to longer-term assets that investors are most overlooking as the economy recovers — and recommends 3 portfolio shifts for sustained gains

The IPO market remains open following the trading debuts of tech names like Snowflake and JFrog last week. Jack Ma's Ant Group will seek to raise $35 billion in its initial public offering, which would make it the largest ever, according to Bloomberg.

Gold fell as much as 3.5%, to $1,882.51 per ounce, falling below the range of $1,900 to $2,000 where it had been for weeks. Treasury yields traded mostly flat, while the US dollar gained ground.

Oil prices slid as investors continued to weigh reports of a supply glut and lower demand heading into the fall. West Texas Intermediate crude fell as much as 6%, to $38.66 per barrel. Brent crude, oil's international benchmark, decreased 5.1%, to $40.96 per barrel, at intraday lows.

Read more: An ex-Wall Street chief strategist says the market's comeback has made most investors 'blissfully unaware' of its real risks — and lays out 6 reasons why another free-fall is on the cards

Read the original article on Business Insider

Investors pulled $3.5 billion out of the biggest tech ETF in a single day — the most since 2000

NYSE trader worried
  • Investors are fleeing technology stocks at a pace not seen since the dot-com bubble of 2000.
  • They pulled $3.5 billion out of the popular Invesco QQQ Trust Series 1 ETF, which tracks the Nasdaq 100 index, on Friday. That marked the biggest daily outflow since October 2000.
  • The Nasdaq 100 index is sitting more than 10% from recent highs, putting it in correction territory.
  • Visit Business Insider's homepage for more stories.

Investors on Friday pulled $3.5 billion out of the popular Invesco QQQ Trust Series 1 ETF, which tracks the Nasdaq 100 index, according to Bloomberg data.

That marked the biggest single-day outflow since October 2000, amid the dot-com bubble.

The mass exit reflects the unease in the tech sector that's sent the Nasdaq 100 tumbling into correction territory in recent weeks. On Monday, the gauge sat roughly 13% below its September 2 peak.

The Invesco QQQ ETF, the biggest technology exchange-traded fund available to investors, had more than $120 billion in assets as of Friday.

Read more: GOLDMAN SACHS: Buy these 21 stocks on track for years of market-beating growth that could make them future giants — even rivals to the FAANGs

The three-week skid in technology stocks comes as investors grapple with uncertainty surrounding the November presidential election, additional fiscal stimulus measures in response to the COVID-19 pandemic, and the development and rollout of a COVID-19 vaccine.

The Nasdaq 100 is on pace to lose more than 10% in September, which would be its worst month since 2008.

On Monday, despite continued selling in the index, the Nasdaq 100 outperformed the Dow Jones industrial average and the S&P 500, suggesting that investors may warm up to tech stocks again as economic uncertainty persists.

Read more: Tony Greer made 5x his money with an early investment in Apple. The macro investor and ex-Goldman Sachs trader provides an inside look into his trading tactics, and shares his top 3 ideas right now.

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Dow plummets 900 points amid growing fears of another virus lockdown

trader nyse worried chart
  • Stocks started the week off significantly lower after reports over the weekend about rising COVID-19 daily cases and allegations of money laundering at big-name banks.
  • Political uncertainty is on the rise following the death of Supreme Court Justice Ruth Bader Ginsburg as the US approaches its presidential election in November.
  • Watch major indexes update live here.

US stocks tumbled on Monday as investors grappled with a range of headwinds including rising COVID-19 daily cases, a possible "mini lockdown" in the UK, and allegations of money laundering at big-name banks.

Political uncertainty continues to be front and center for investors ahead of the presidential election in November and is heightened following the death of Supreme Court Justice Ruth Bader Ginsburg on Friday.

Here's where US indexes stood at 11:25 a.m. on Monday:

Read more: GOLDMAN SACHS: Buy these 21 stocks on track for years of market-beating growth that could make them future giants — even rivals to the FAANGs

Reports from the UK suggest that another lockdown there due to rising COVID-19 cases is not out of the question as Prime Minister Boris Johnson considers it as a "circuit breaker" for the virus.

Bank of America, Wells Fargo, Citigroup, and JPMorgan traded sharply lower on Monday following a BuzzFeed News report that exposed $2 trillion in suspicious transactions by banks and allegations that they enabled money laundering by criminal networks.

ByteDance, the owner of TikTok, is seeking a valuation of its popular social-media app of as much as $60 billion, according to Bloomberg.

Read more: Morgan Stanley wealth management's head of market research told us a risk to longer-term assets that investors are most overlooking as the economy recovers — and recommends 3 portfolio shifts for sustained gains

The IPO market remains open following the trading debuts of tech names like Snowflake and JFrog last week. Jack Ma's Ant Group will seek to raise $35 billion in its initial public offering, which would make it the largest ever, according to Bloomberg.

Gold fell as much as 2%, to $1,911.75 per ounce, remaining in a narrow trading range of $1,900 to $2,000. Both Treasury yields and the US dollar gained ground.

Oil prices slid as investors continued to weigh reports of a supply glut and lower demand heading into the fall. West Texas Intermediate crude fell as much as 2.9%, to $39.94 per barrel. Brent crude, oil's international benchmark, decreased 2.6%, to $42.05 per barrel, at intraday lows.

Read more: An ex-Wall Street chief strategist says the market's comeback has made most investors 'blissfully unaware' of its real risks — and lays out 6 reasons why another free-fall is on the cards

Read the original article on Business Insider

One stock market signal suggests the US presidential race is tightening, Goldman Sachs says

biden trump
  • The trading activity of certain stocks is sending a signal to investors that the upcoming Presidential election this November is going to be close — and is getting closer, Goldman Sachs said on Friday.
  • The relative outperformance of high-tax stocks relative to their low-tax counterparts signals a recent preference for stocks expected to benefit from a Republican victory.
  • It specifically suggests a 53% probability of corporate tax reform, according to Goldman. The firm says this is only likely happen if Democrats pull off a sweep in November.
  • Visit the Business Insider homepage for more stories.

Judging by the trading activity of certain stocks, the presidential election in November is getting tighter — although it still favors a Democratic sweep, Goldman Sachs said in a note on Friday.

Specifically, the recent outperformance of a basket of stocks with high corporate tax rates relative to its low-tax counterpart signals a recent preference for companies expected to benefit from a Republican victory. Further, the direct probability of Joe Biden's proposed tax hike has declined in recent weeks, although it remains the more likely outcome, Goldman data show.

Both dynamics are reflected in the charts below:

Goldman election onte.JPG

Specifically, the high-tax basket's outsized returns currently imply a 53% probability of corporate tax reform, the note said. Reversing President Donald Trump's signature 2017 tax legislation is a Biden policy initiative that could likely only be pulled off if Democrats controlled both Congress and the White House.

The 53% probability of corporate tax reform is in line with prediction market's 54% probability of a Democratic sweep this November, Goldman highlighted. 

Read more: GOLDMAN SACHS: Buy these 21 stocks on track for years of market-beating growth that could make them future giants — even rivals to the FAANGs

Despite the declining implied probability of a Democratic victory, there are still signs that investors are preparing for a full sweep.

"Education and clean energy stocks have moved in directions consistent with a rising probability of Democratic sweep," Goldman said.

Clean energy stocks have outperformed the S&P 500 by 55 percentage points year-to-date, while for-profit education stocks have lagged the broader market in recent months. 

If Democrats do pull off a sweep in November, Goldman says to expect a period of heightened market volatility as investors grapple assessing the impact of Biden policy initiatives amid a global pandemic and sharp economic decline. 

Read more: An ex-Wall Street chief strategist says the market's comeback has made most investors 'blissfully unaware' of its real risks — and lays out 6 reasons why another free-fall is on the cards

While corporate and tax hikes from the Biden administration would reduce 2021 S&P 500 earnings by 9% and likely hurt stocks, large fiscal expansion initiatives and less uncertainty with trade policy could be a tailwind for stocks, Goldman said.

Biden's plan includes $7 trillion in gross fiscal spending on infrastructure, education, clean energy, and healthcare, Goldman noted.

Finally, investors should brace for a period of extended and heightened volatility based on current implied moves in option pricing "as investors assess the potential for it to take longer than usual to reach definitive election results," the note said.

"The market now shows an extended period of high volatility well beyond Election Day. This likely reflects the potential for election results to be finalized with a delay," Goldman said. 

Read more: Legendary options trader Tony Saliba famously put together 70 straight months of profits greater than $100,000. Here's an inside look at the strategy that propelled him to millionaire status before age 25.

Read the original article on Business Insider

ByteDance floats US IPO for TikTok in effort to win White House approval

TikTok
  • One avenue ByteDance is exploring to satisfy President Trump's concerns about TikTok is a US IPO, CNBC's David Faber reported on Thursday, citing sources.
  • ByteDance spinning off TikTok with a US listing could satisfy President Trump's objection of the Beijing-based tech company retaining a majority stake in TikTok.
  • Walmart and Oracle would likely own minority stakes in a spunoff TikTok, according to Faber.
  • Visit the Business Insider homepage for more stories.

ByteDance is exploring plans to spinoff its global TikTok operations in the form of an IPO on a US stock exchange, CNBC's David Faber reported on Thursday.

The move could satisfy President Trump's ownership concerns regarding ByteDance and TikTok. Trump said on Wednesday that he doesn't like the idea of Beijing-based ByteDance retaining a majority stake in TikTok. 

Oracle would own a minority stake in TikTok of less than 20%, while Walmart is also expected to take a stake in the popular social media company, according to Faber. The potential size of Walmart's stake is still unknown.

There would likely be a new US board of directors for TikTok's American operations, with Walmart CEO Doug McMillion expected to have a seat on the board, CNBC reported.

Read more: Jefferies handpicks the 17 best stocks spanning multiple sectors to buy now — and details why each company's future looks 'particularly attractive,' even in a downturn

A potential TikTok IPO would likely mark the largest technology IPO in recent years, with the company being most recently valued at an estimated $50 billion in private funding rounds, according to Reuters.

In recent days, Trump has been meeting with cabinet members and advisers like Secretary of Treasury Steve Mnuchin and Jared Kushner on whether or not to approve a proposed TikTok deal with Oracle, according to CNBC.

Friday's announcement that the Trump administration would block app downloads of TikTok and WeChat starting this Sunday suggest approval of a TikTok deal with Oracle is still up in the air. 

Read more: A Wall Street firm shares its 5 best ideas for investors who need alternatives to expensive tech stocks — including trades poised to turnaround after getting pummeled by the pandemic

Read the original article on Business Insider

US stocks drop as traders mull the Fed’s uncertain economic outlook

Trader NYSE
  • US stocks closed lower on Thursday as investors continued to digest the Fed's uncertain economic outlook and weekly jobless claims that still exceed the highs of the Great Recession.
  • Federal Reserve Chair Jerome Powell's comments on Wednesday expressed uncertainty in the economic recovery and mentioned that the Fed didn't expect to raise interest rates until at least 2023.
  • Additionally, weekly jobless claims fell by more than 30,000 from the previous week, to 860,000, though that was higher than the consensus estimate of 850,000. 
  • The current weekly jobless claim figures are still well above the 6650,000 peak reached during the Great Recession in 2009.
  • Oil prices traded higher after reports that Saudia Arabia stressed OPEC+ compliance to its members. West Texas Intermediate crude jumped as much as 2.6%, to $41.22 per barrel.
  • Watch major indexes update live here.

US stocks fell on Thursday as investors continued to digest comments from Federal Reserve Chair Jerome Powell and weekly jobless-claims data.

Federal Reserve Chairman Jerome Powell's comments on Wednesday expressed uncertainty in the economic recovery and mentioned that the Fed didn't expect to raise interest rates until at least 2023.

In a signal that the economic recovery from the COVID-19 pandemic is muddling along, weekly jobless claims fell by more than 30,000 from the previous week, to 860,000, slightly higher than the consensus estimate of 850,000.

The current weekly jobless claim figures are still well above the 6650,000 peak reached during the Great Recession in 2009.

Tech stocks led the decline even after the cloud-tech platform Snowflake staged the biggest initial public offering of the year on Wednesday. Its stock more than doubled in its first day of trading.

Here's where US indexes stood at the 4 p.m. market close on Thursday:

Read more: A Wall Street firm says investors should buy these 15 cheap, high-earning stocks now to beat the market in 2021 as more expensive companies fall behind

Going forward, investors will likely turn their attention to additional stimulus measures from Congress. While Republicans and Democrats haven't landed on the same page on a "skinny" deal, key negotiators have seemed increasingly optimistic about a deal, and pressure is mounting to get a deal done before the November election.

President Donald Trump on Wednesday said Republicans should warm up to the idea of sending bigger direct payments to Americans.

Meanwhile, technical traders likely have their eye on the 50-day moving average, as multiple US stock market indexes converge on the important support level.

Read more: Legendary options trader Tony Saliba famously put together 70 straight months of profits greater than $100,000. Here's an inside look at the strategy that propelled him to millionaire status before age 25.

Elsewhere, Yelp said in a report that 60% of the 163,735 businesses that had closed in the US as of August 31 because of the pandemic wouldn't reopen, suggesting that small businesses have fared worse than big ones. The total business closures represented a 23% jump since mid-July, Yelp said.

The SPAC craze continued as Richard Branson announced plans to launch a $400 million special-purpose acquisition company. Branson has experience with SPACs: His Virgin Galactic went public via merging with a SPAC led by the billionaire investor Chamath Palihapitiya.

Spot gold fell as much as 1.3%, to $1,932.95 per ounce. The US dollar extended its decline while Treasury yields were mostly flat.

Crude-oil futures rose markedly after Saudia Arabia stressed to OPEC+ members to stick to their production quotas and to not overproduce,according to Bloomberg. West Texas Intermediate crude jumped as much as 2.6%, to $41.22 per barrel. Brent crude, oil's international standard, rose 3%, to $43.50 per barrel, at intraday highs.

Read more: 3 top investing executives lay out the biggest risks to markets heading into a volatile election season — and share their best recommendations for navigating what happens next

Read the original article on Business Insider

The S&P 500 is flirting with a key support threshold — and a failure to hold it could lead to more selling

trader nyse pray
  • The S&P 500 is flirting with a key technical support level that traders have their eye on: the 50-day moving average.
  • The benchmark equity index opened lower on Thursday as tech stocks led the market decline, but selling dried up near the 50-day support level around 3,340.
  • If the index decisively falls below the 50-day moving average, traders will likely look to the 200-day moving average to serve as support, which would represent a potential decline of 8% from Wednesday's close.
  • One sign doesn't bode well for the S&P 500: the leading Nasdaq 100 index opened the day below its 50-day moving average, something it hasn't done since mid-April.
  • Visit Business Insider's homepage for more stories.

The stock market is in the midst of determining if its historic rally will power on or start to break down.

On Thursday, the S&P 500 traded lower by more than 1% — led by technology stocks — but managed to find support right along its 50-day moving average around the 3,340 level.

The 50-day moving average is a widely followed technical indicator that smoothes out price action and represents the average closing price of the previous 50-days.

Traders often look to the 50- and 200-day moving averages as important support levels when a security is trading above the averages, and important resistance levels when a security is trading below the averages.

If the S&P 500 decisively trades and closes below its 50-day moving average, traders will look to the 200-day moving average, currently around the 3,100 level, as the next level of support. A fall to the 200-day moving average would represent a decline of 8% in the S&P 500 from Wednesday's close.

Read more: A Wall Street firm says investors should buy these 15 cheap, high-earning stocks now to beat the market in 2021 as more expensive companies fall behind

Alternatively, if the index manages to hold and bounce off of the 50-day moving average, traders will look for the S&P 500 to continue its march higher, retest its September 2 record-high, and extend its historic rally to new all time highs.

But one glaring sign suggests that the S&P 500 may move below its 50-day moving average: the Nasdaq 100. Of the 3 most popular US stock market indexes, the Nasdaq 100 has led them all higher since the March 23 bottom as technology stocks have driven most of the upside.

On Thursday, the Nasdaq 100 opened below its 50-day moving average and stayed their throughout Thursday's trading session. Barring a late-day recovery, today will mark the first time the Nasdaq index has traded below its 50-day moving average since April 13.

If tech stocks lead the market lower like they did higher over the past 6 months, then expect the S&P 500 to follow its lead and trend below its 50-day moving average.

But for now, as of Thursday afternoon, the S&P 500 is holding its ground.

Read more: Legendary options trader Tony Saliba famously put together 70 straight months of profits greater than $100,000. Here's an inside look at the strategy that propelled him to millionaire status before age 25.

spx moving average.JPG
Read the original article on Business Insider

The S&P 500 is flirting with a key support threshold — and a failure to hold it could lead to more selling

trader nyse pray
  • The S&P 500 is flirting with a key technical support level that traders have their eye on: the 50-day moving average.
  • The benchmark equity index opened lower on Thursday as tech stocks led the market decline, but selling dried up near the 50-day support level around 3,340.
  • If the index decisively falls below the 50-day moving average, traders will likely look to the 200-day moving average to serve as support, which would represent a potential decline of 8% from Wednesday's close.
  • One sign doesn't bode well for the S&P 500: the leading Nasdaq 100 index opened the day below its 50-day moving average, something it hasn't done since mid-April.
  • Visit Business Insider's homepage for more stories.

The stock market is in the midst of determining if its historic rally will power on or start to break down.

On Thursday, the S&P 500 traded lower by more than 1% — led by technology stocks — but managed to find support right along its 50-day moving average around the 3,340 level.

The 50-day moving average is a widely followed technical indicator that smoothes out price action and represents the average closing price of the previous 50-days.

Traders often look to the 50- and 200-day moving averages as important support levels when a security is trading above the averages, and important resistance levels when a security is trading below the averages.

If the S&P 500 decisively trades and closes below its 50-day moving average, traders will look to the 200-day moving average, currently around the 3,100 level, as the next level of support. A fall to the 200-day moving average would represent a decline of 8% in the S&P 500 from Wednesday's close.

Read more: A Wall Street firm says investors should buy these 15 cheap, high-earning stocks now to beat the market in 2021 as more expensive companies fall behind

Alternatively, if the index manages to hold and bounce off of the 50-day moving average, traders will look for the S&P 500 to continue its march higher, retest its September 2 record-high, and extend its historic rally to new all time highs.

But one glaring sign suggests that the S&P 500 may move below its 50-day moving average: the Nasdaq 100. Of the 3 most popular US stock market indexes, the Nasdaq 100 has led them all higher since the March 23 bottom as technology stocks have driven most of the upside.

On Thursday, the Nasdaq 100 opened below its 50-day moving average and stayed their throughout Thursday's trading session. Barring a late-day recovery, today will mark the first time the Nasdaq index has traded below its 50-day moving average since April 13.

If tech stocks lead the market lower like they did higher over the past 6 months, then expect the S&P 500 to follow its lead and trend below its 50-day moving average.

But for now, as of Thursday afternoon, the S&P 500 is holding its ground.

Read more: Legendary options trader Tony Saliba famously put together 70 straight months of profits greater than $100,000. Here's an inside look at the strategy that propelled him to millionaire status before age 25.

spx moving average.JPG
Read the original article on Business Insider

Dow tumbles 320 points as tech sell-off outweighs encouraging jobless-claims data

trader nyse worried chart
  • US stocks fell on Thursday, even as weekly jobless-claims data came in better than expected.
  • Weekly jobless claims fell by more than 30,000 from the previous week, to 860,000, though that was higher than the consensus estimate of 850,000.
  • Tech stocks led the decline as investors continued to digest Federal Reserve Chairman Jerome Powell's comments on Wednesday expressing uncertainty about the economic recovery and saying the Fed didn't expect to raise interest rates until at least 2023.
  • Oil prices traded flat after reports that US stockpiles fell by 9.5 million barrels last week. West Texas Intermediate crude fell as much as 1.8%, to $39.42 per barrel.
  • Watch major indexes update live here.

US stocks fell on Thursday as investors continued to digest weekly jobless claims data and Wednesday's comments from Federal Reserve Chair Jerome Powell.

In a signal that the economic recovery from the COVID-19 pandemic continues to muddle along, weekly jobless claims fell by more than 30,000 from the previous week to 860,000, slightly higher than consensus estimates of 850,000 claims.

Tech stocks led the decline on Thursday even after cloud-tech platform Snowflake staged the biggest IPO of the year on Wednesday, with its stock more than doubling in its first day of trading. 

Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Thursday:

Read more: A Wall Street firm says investors should buy these 15 cheap, high-earning stocks now to beat the market in 2021 as more expensive companies fall behind

Investors continued to digest Fed Chairman Jerome Powell's Wednesday afternoon Fed policy speech, in which he expressed uncertainty over the ongoing economic recovery. A majority of the Fed Board of Governors don't expect to raise interest rates until at least 2023. 

Going forward, investors will likely turn their attention to additional stimulus measures from Congress. While the Republicans and Democrats are yet to land on the same page in terms of a "skinny" deal, optimism seems to be increasing among key negotiators that a deal can be reached.

President Donald Trump on Wednesday called for Republicans to warm up to the idea of sending bigger direct payment stimulus checks to Americans.

Read more: A Wall Street firm shares its 5 best ideas for investors who need alternatives to expensive tech stocks — including trades poised to turnaround after getting pummeled by the pandemic

Elsewhere, Yelp said 60% of businesses that shut down in the US due to the pandemic won't be reopening, in a sign that small business is faring worse than big business amid the COVID-19 pandemic. As of August 31, 163,735 US businesses have shut down, a 23% jump since mid-July, according to Yelp.

The SPAC craze continued on Thursday after Richard Branson announced plans to launch a $400 million SPAC. Branson has experience with SPACs, as his Virgin Galactic went public via merging with a SPAC led by billionaire investor Chamath Palihapitiya. 

Spot gold fell as much as 1.3%, to $1,933.17 per ounce. The US dollar extended its decline while Treasury yields rose slightly.

Crude-oil futures fell after the American Petroleum Institute reported that US inventories fell by 9.5 million barrels last week, according to Bloomberg. West Texas Intermediate crude fell as much as 1.8%, to $39.42 per barrel. Brent crude, oil's international standard, fell 1.7%, to $41.50 per barrel, at intraday lows.

Read more: MORGAN STANLEY: Buy these 6 stocks poised for gains as the economic recovery continues and Congress mulls more coronavirus stimulus

Read the original article on Business Insider

Sorrento Therapeutics soars 27% after FDA green-lights COVID-19 antibody trial

sorrento therapeutics
  • Sorrento Therapeutics soared on Thursday after the biotechnology firm received clearance from the FDA to proceed with a phase I clinical trial evaluating COVI-GUARD, a COVID-19 antibody test.
  • Sorrento is targeting a potential emergency use authorization submission to the FDA before the end of this year.
  • Sorrento initiated manufacturing processes to produce 50,000 doses in anticipation of receiving emergency use authorization for the COVID-19 antibody.
  • Visit Business Insider's homepage for more stories.

Sorrento Therapeutics soared on Thursday after the biotechnology firm received FDA clearance to proceed with a phase I clinical trial evaluating STI-1499, also known as COVI-GUARD, a "neutralizing" antibody for patients who tested positive for COVID-19.

Shares traded up as much as 27% to $10.60 in Thursday trades. 

Sorrento expects a quick enrollment phase for the clinical trial and expects this trial to be followed by large trials targeting a potential emergency use authorization submission to the FDA as early as the end of this year.

The firm has initiated manufacturing processes to produce 50,000 doses in anticipation of receiving emergency use authorization for the COVID-19 antibody.

Read more: A Wall Street firm says investors should buy these 15 cheap, high-earning stocks now to beat the market in 2021 as more expensive companies fall behind

According to Sorrento, its COVID-19 antibody "has been 100% effective against the highly contagious D614G variant strain," which is a mutation variant of SARS-CoV-2. 

"The potentially high potency of STI-1499 antibody may allow for rapid scaling up of manufacturing operations," Sorrento said.

Sorrento said it submitted data generated from testing on Syrian Golden hamsters infected with SARS-CoV-2 to the FDA in support of its antibody testing trial.

Read more: MORGAN STANLEY: Buy these 6 stocks poised for gains as the economic recovery continues and Congress mulls more coronavirus stimulus

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