Plus, initial jobless claims were lower than expected, AstraZeneca shares are down after the FDA said it’s expanding its inquiry into the serious illness of a participant in its COVID vaccine trial, and the CEOs of Facebook, Google, and Twitter will be subpoenaed for testimony by the Senate Commerce Committee.
Stocks were higher to start Thursday with the Dow adding 73 points, or 0.26%. The S&P 500 gained 0.5%, while the Nasdaq rose 0.85%.
Initial jobless claims totaled 837,000 last week, the Labor Department reported, lower than the 850,000 claims anticipated by economists. While the total was below 1 million for the fifth consecutive week, it was still well above anything the U.S. has seen since before the coronavirus crisis. “Jobless claims declined slightly more than expected, but remained stubbornly high amid mounting layoff announcements,” said Bloomberg economist Eliza Winger. “Claims have been artificially skewed lower in this week’s data as a result of California putting applications on hold to revamp its system.” A separate report out this morning showed Americans’ incomes fell in August by the most in three months after the government’s supplemental unemployment benefits expired. The Commerce Department data said personal incomes dropped 2.7% in August. “Labor income now has a big headwind when you add the fact that that extra unemployment income has been taken away at the beginning of August and the fact that state and local governments are straining,” said James Sweeney, chief economist at Credit Suisse Group AG.
As trouble spots continue to linger in the U.S. economy, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin will try to scrape together a coronavirus stimulus deal today following a 90-minute meeting yesterday. In yesterday’s meeting, Mnuchin offered a $1.6 trillion proposal that included $250 billion for state and local governments, $400 per week in extra unemployment benefits, $150 billion for education, $75 billion for COVID-19 testing and contact tracing, $60 billion for rental and mortgage assistance, and $25 billion in relief for airlines. Pelosi told her closest deputies by phone this morning that she is skeptical of reaching an agreement with Mnuchin on another virus-relief bill, according to two people familiar with what happened on the call. Democrats have been pushing for more than $400 billion in state and local aid, as well as to reinstate the $600 per week in extra jobless benefits. The speaker said the GOP doesn’t “share our values” or want to put what she sees as needed money into state and local governments and health care, the source said.
AstraZeneca shares are lower this morning after the FDA said it was expanding its inquiry into the serious illness of a participant in the trial of the potential COVID-19 vaccine developed by the company in partnership with Oxford University. The participant’s medical condition—a rare spinal inflammatory disorder called transverse myelitis— caused AstraZeneca’s large, late-stage U.S. trial to be put on hold on September 6, and the widened scope of the FDA’s probe is likely to result in additional delays for the vaccine trial. “We are continuing to work with the FDA to facilitate review of the information needed to make a decision regarding resumption of the U.S. trial,” AstraZeneca said in a statement.
The Senate Commerce Committee voted unanimously this morning to subpoena the CEOs of Facebook, Google, and Twitter to testify before the panel about concerns over the tech industry’s key legal shield, Section 230 of the Communications Decency Act. Section 230 allows online platforms to be protected from liability for their users’ posts and their moderation practices if taken in good faith, and has been repeatedly brought up as a key area for reform, especially by Republicans who have expressed concerns that Facebook, Twitter, and Google’s Youtube have censored conservative voices. “I welcome the debate about [Section] 230,” said Sen. Maria Cantwell, the top Democrat on the committee. “I think it should be a long and thoughtful process. Not sure a long and thoughtful process will happen before the election, but I understand my colleagues’ desires here today.” Cantwell stressed, however, “what I don’t want to see is a chilling effect on individuals who are in a process of trying to crack down on have speech or misinformation about COVID during a pandemic.”
And in earnings news, PepsiCo reported this morning that its quarterly sales grew by more than 5% as consumers continue to snack away amid the pandemic buying more of its Tostitos brand and pancake mixes. Pepsi reported earnings per share of $1.66 on revenue of $18.09 billion, beating estimates for earnings per share of $1.49 on revenue of $17.23 billion. And Bed Bath & Beyond shares are up 34% this morning after the home-goods retailer reported its first same store sales increase in nearly four years as its online business surged more than 80% during the quarter. For its fiscal second quarter, Bed Bath & Beyond reported earnings per share of $0.50 on reeve of $2.69 billion, versus expectations for a loss of $0.23 per share on revenue of $2.60 billion.“When home is everything, we’re really poised to be the epicenter of that,” said BBBY CEO Mark Tritton. “We were agile about getting after that.”
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Soleno Therapeutics Inc (NASDAQ: SLNO): Soleno Therapeutics shares rocketed nearly 45% higher yesterday after the biotech announced updated top-line results from its Phase 3 trial, DESTINY PWS (C601), evaluating once-daily Diazoxide Choline Controlled Release (DCCR) tablets for patients with Prader-Willi Syndrome (PSW). “The results from this program continue to demonstrate DCCR’s beneficial impact on hyperphagia, the predominant symptom of PWS, other behaviors typical of PWS, as well as problems related to body composition, and a safety profile that is well understood,” said Dr. Miller, a Principal Investigator in the Soleno study. “The sum total of data presented to date suggest that DCCR, if approved, may be a safe and effective treatment option that can address both the behavioral and metabolic components of PWS. I look forward to continued progress in advancing DCCR as the first potentially approved treatment for key unmet needs associated with PWS, a devastating condition with life-threatening comorbidities.”