- Zoom dove as much as 16% in early Monday trading after Pfizer’s encouraging COVID-19 drug results dragged stay-at-home stocks lower.
- The pharmaceutical company announced Monday morning that it’s experimental coronavirus drug was more than 90% effective in preventing COVID-19 in trial participants.
- The news lifted global stocks, particularly those for firms hit hardest by the pandemic like airlines and hotels.
- Conversely, stay-at-home names including Zoom, DocuSign, and Peloton tumbled as investors bet on the vaccine bringing an end to the global health crisis.
- Watch Zoom trade live here.
The US pharmaceutical giant announced Monday morning that its experimental coronavirus vaccine, created in collaboration with BioNTech, was more than 90% effective in preventing COVID-19 in trial participants. Pfizer said it will apply to the US Food and Drug Administration for emergency-use authorization, a process that would allow for a faster rollout of the vaccine.
The positive news fuelled new hopes that a viable coronavirus drug can end the global health crisis. US stock futures surged higher. Industries slammed hardest by the virus, including airlines, hotels, and cruises, rallied in early trading.
Conversely, companies that thrived through quarantine orders and prolonged stay-at-home activity tanked. DocuSign,Peloton, and Wayfair joined Zoom and others in the sell-off as investors boosted bets on a safe reopening.
Zoom was among the market’s biggest winners through the year as its video conferencing software became ubiquitous with telecommuting. The company’s shares closed at $US500.11 on Friday, up nearly 650% year-to-date.
Monday’s slump places the stock at its lowest since late September.
The stay-at-home group’s plunge repeats a trading pattern seen after the release of similarly positive vaccine updates. Promising data from Gilead, Moderna, and AstraZeneca’s drug trials dragged on telecommuting stocks earlier in the year. The stocks tended to rise when vaccine candidates failed trials or virus cases trended higher.
With the world facing a resurgence in coronavirus infections and several advanced economies entering new lockdowns, Pfizer’s announcement cuts into strong momentum for Zoom shares.
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