Dow under pressure, Nasdaq climbs as U.S. pauses Johnson & Johnson COVID vaccine rollout

How are stock benchmarks trading?

• The Dow Jones Industrial Average
  DJIA,
  -0.14%
  were trading 141 points lower at around 33,604, a decline of 0.4%.

• The S&P 500 index
  SPX,
  +0.34%
  was up 7 points at 4,134, or up 0.2%.

• The Nasdaq Composite Index
  COMP,
  +1.02%
  rose 107 points, or 0.8%, to 13,957.

On Monday, the Dow slipped 55.20 points to close at 33,745.40, a decline of 0.2%; the S&P 500 gave up less than a point to finish at 4,127.99; while the Nasdaq Composite declined 50.19 points, ending at 13,850.00, a loss of 0.4%.

What’s driving the market?

Technology stocks were on the rise, but the broader market was mixed Tuesday after the two leading U.S. federal public health agencies, the Food and Drug Administration and Centers for Disease Control and Prevention called for an immediate pause in the use of the Johnson & Johnson’s
JNJ,
-1.37%
COVID-19 vaccine, after six women recipients in the U.S. developed a rare disorder involving blood clots within six to 13 days after being vaccinated.

The news had a modest impact on the investment mood on Wall Street, but may be a reminder of some of the challenges of reopening the economy from the worst pandemic in more than a century.

“Fortunately, the U.S. vaccination rollout is well underway, so the downside effect on both oil and U.S. stocks should be fairly limited,” wrote Stephen Innes, chief global strategist at Axi. He added that with the stock market near records, it has been sensitive to negative headlines.

So far, nearly 7 million Americans have received J&J shots, and about 9 million more have been delivered to states, CDC data show. Scientists from the FDA and CDC will jointly investigate possible links between the vaccine and the clotting disorder and determine whether it should continue to be used or limited. 

The J&J shot, which showed 66.1% efficacy in preventing moderate to severe disease, had been seen as a game-changer for getting Americans rapidly vaccinated. J&J’s shot was the third cleared for use in the U.S., behind the two-shot Pfizer
PFE,
+0.43%
and Moderna
MRNA,
+6.95%
vaccines.

The vaccine report comes as the U.S. is facing a new rise in COVID cases, with reports of 70,000 new coronavirus infections per day, according to data from Johns Hopkins University. That is even after hitting a single-day vaccine record of 4.6 million shots on Sunday. Michigan has been advised by the CDC to “close things down” to help address the country’s worst coronavirus outbreak.

The economic rebound has been closely tied to the U.S. vaccination effort and its work getting children back in schools.

Federal Reserve Bank of St. Louis President James Bullard on Monday said that that although it was too early to talk about dialing back the central bank’s accommodation, he said that getting 75% or 80% of people vaccinated might signal that it is time to taper the Fed’s bond purchases.

Meanwhile, data showed U.S. consumer prices rising in March for the fourth month in a row, with the pace of inflation hitting the highest level in 2½ years. The rate of inflation over the past year shot up to 2.6% from 1.7% in the prior month, marking the highest level since the fall of 2018.

Fed officials have emphasized that they are willing to keep benchmark interest rates near 0% even if inflation starts to rise because policy makers think it will be transitory. However, market participants have expressed some skepticism of the central bank’s inflation outlook.

See: Fed doesn’t see inflation running out of control, Harker says

Which companies are in focus?

• Nvidia Corp.’s
  NVDA,
  +2.77%
  stock traded at record highs Tuesday as analysts hiked price targets and applauded the chip maker’s plans to branch out into its rivals’ territory.

• Shares of J&J were down 2% after the FDA and the CDC called for an immediate pause in the use of its COVID-19 vaccine on Tuesday “out of an abundance of caution.”

• Boeing Co. 
  BA,
  +1.60%
  shares were up 1.3 after it reported delivering 77 commercial airplanes in the first quarter, which is 54% more than the number delivered in the first quarter of 2020.

• Investors may also be watching a report on inflation and news that Singapore-based Grab Holdings Inc. is going public through a merger with special-purpose acquisition company Altimeter Growth Corp. AGC.

• Nike Inc.  
  NKE,
  -2.01%
  shares fell 2.2% after it detailed a program that will give a “second life” to returned shoes, an effort to address the consumer concern over climate change and environmental degradation.

How are other assets faring?

• The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was down 0.3%.

• U.S. crude
  CL.1,
  +1.16%
   for May delivery
  CLK21,
  +1.16%
   gained 50 cents, or 0.9%, to trade at $60.20 a barrel on the New York Mercantile Exchange.

• The 10-year Treasury note yield TMUBMUSD10Y shed 4 basis points to 1.63% after the CPI report. Bond prices move inversely to yields.

• Gold futures traded higher, with the June contract
  GCM21,
  +0.73%
  climbing $14.90, or 0.9%, to settle at $1,747.60 an ounce on Comex.

• In Europe, the Stoxx 600 index SXXP traded 0.1% higher, while London’s FTSE 100 UKX ended flat.

• In Asia, the Shanghai Composite SHCOMP finished 0.1% lower, Hong Kong’s Hang Seng HSI closed down 0.2%, and Japan’s Nikkei 225 NIK rose 0.7%.