Gold Lodges New Record as Disney and Drug Earnings Drive Up Equities

 MANHATTAN (CN) — A disappointing jobs report did not dissuade investors from rallying for a fourth straight day, as Wall Street packed on gains.

The Dow Jones Industrial Average increased 373 points, about a 1.4% increase, while the S&P 500 and Nasdaq gained 0.6% and 0.5%, respectively. Despite the rise in equities, gold also hit a new high mark: $2,056 per ounce by the 4 p.m. EST.

The market gains were likely driven by positive earnings reports from Walt Disney and pharmaceutical company Moderna.

In its earnings release, Moderna reported a 406% year-over-year jump in revenue, from $66.4 million last quarter compared with $13.1 million during the same quarter a year ago. Most of the revenue was driven by collaboration with other companies and grants, Moderna said. The company had a lesser net loss last quarter compared with a year ago, at $116.7 million compared with about $135 million.

“The second quarter marked a new growth phase for Moderna as we started to build our commercial team,” CEO Stephane Bancel said in a statement. “As we pivot to a commercial stage company, we recognize the need for responsible pricing in the face of the pandemic.”

The company has been a darling of Wall Street lately, on track to conclude enrollment for Phase 3 of its its Covid-19 vaccine candidate in September.

Early-stage clinical trials of the drug showed promise without side effects last month, but Moderna’s stock dropped 3.3% in trading on Wednesday — some of its thunder stolen by Johnson & Johnson, which announced it a $1 billion deal with the U.S. government to produce 100 million doses of a potential vaccine for Covid-19. J&J stock traded up 0.8% for the day. 

Walt Disney’s earnings helped buoy markets as well, with the entertainment company reporting a 42% drop in revenues, from $20.2 billion in Q2 2019 to $%11.7 billion last quarter. Disney also showed a $4.7 billion loss in net income last quarter compared with a $1.4 billion profit during the same quarter last year. 

“Despite the ongoing challenges of the pandemic, we’ve continued to build on the incredible success of Disney+ as we grow our global direct-to-consumer businesses,” CEO Bob Chapek said in a statement.

Disney stock traded heavily throughout the day due to its earnings hitting $0.08, beating expectations by many analysts who had expected a loss in earnings of $0.60. Shares of Disney gained 8.8% by the end of the day’s trading.

The earnings reports were set against the backdrop of a poor jobs report by ADP, which showed only 167,000 non-farm jobs were gained last month. Many on Wall Street had expected — or hoped — that the report would show a gain of at least 1 million jobs in July.

All but 1,000 of the jobs gained came from the service sector versus manufacturing, with a fairly equal breakdown among the professional-business, trade-transportation, education-health care and leisure-hospitality industries. Most of the job gains were among small and large businesses, while medium-sized businesses lost about 25,000 jobs.

The last two ADP reports have been very good — marking 3.3 million and 4.3 million jobs gained for May and June, respectively — but came off of the horrible 19.4 million jobs lost in April. The economy would have to gain about 12 million jobs just to return to its March baseline.

“The latest ADP reading was interesting to say the least,” David Madden, a market analyst at CMC Markets, said in an investor’s note. He added that June’s jobs report was revised to add nearly 2 million additional jobs. “When you take the two reports together, it paints a positive picture of the labor market.”

Analysts at Goldman Sachs attributed the upward revision for June jobs to a “refit of the ADP model” rather than new information about the labor market. In an investor’s note, they added that July’s report is “additional evidence of a pause in job growth — itself driven by the second wave of infections and associated restrictions on economic activity.”

Cases of coronavirus show no signs of stopping any time soon. More than 18.6 million people have been confirmed infected with Covid-19 since the beginning of the year, and nearly 702,000 have died, according to data compiled by Johns Hopkins University.

In an interview with CNN on Wednesday, White House adviser Dr. Anthony Fauci said the United States currently has the worst outbreak of Covid-19 in the world. “I mean, when you look at the number of infections and the number of deaths, it really is quite concerning,” he said. “I mean, the numbers don’t lie.”

The United States, which represents only 5% of the world’s population, has 25% of the total cases of Covid-19 at nearly 4.8 million confirmed cases, Johns Hopkins finds. The data show the nation has 22% of the total deaths from coronavirus, with 157,000.

Follow @NickRummell

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