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COVID-19 vaccine setback weighs on Wall Street | US & Canada News

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Another vaccine trial halt is sapping investor sentiment on Tuesday, which also marks the kick-off of earnings season and the unofficial start of the critical US holiday shopping season.

United States stock investors have plenty to gnaw on as the trading day kicks off on Wall Street.

News of a setback on a coronavirus vaccine candidate and reports of the first COVID-19 reinfection in the United States are sapping investor sentiment, while the official start of earnings season, the unofficial start of the US holiday shopping season, and Apple’s iPhone launch event are all moving markets.

The Dow Jones Industrial Average fell 83.58 points at the open of trading on Wall Street or 0.29 percent at 28,753.94.

The S&P 500 – a gauge for the health of US retirement and college savings accounts – opened down 0.03 percent.

And the tech-heavy Nasdaq Composite Index opened up 0.25 percent.

Shares of Johnson & Johnson were down more than two percent minutes into the trading session after the pharmaceutical giant said it had paused clinical trials of its coronavirus vaccine candidate due to an “unexplained illness” in a study participant.

Last month, AstraZeneca halted a late-stage trial of a COVID-19 vaccine candidate after a participant fell ill.

The news follows in the wake of more documented evidence that sheds doubt on whether herd immunity to COVID-19 is possible.

Researchers at the University of Nevada confirmed the first documented case of COVID-19 reinfection in the US – adding to the number of confirmed reinfection cases worldwide.

The findings, published in the journal The Lancet Infectious Diseases, also said that the 25-year-old Nevada man who was reinfected suffered a ‘more severe’ illness the second time around.

Shares of JPMorgan Chase & Co were trading up 0.66 percent after the bank reported third-quarter earnings that bettered analysts’ expectations.

The biggest surprise for delighted investors, though, was that the biggest US bank had set aside a mere $611m in the third quarter as a cushion against soured loans compared to $10.5bn it had provisioned in the three months before that. The diminished loan-loss provision signals that the worst damage from the pandemic could be behind JPMorgan.

Shares of Delta Airlines were trading down 1.77 percent after the company reported another huge quarterly loss as the pandemic continues to gut air travel. The first major US carrier to report earnings, Delta said its revenue dropped 76 percent in the third quarter from a year earlier.

The firing gun started on the critical US holiday shopping season – unofficially – as Amazon kicked off its two-day Amazon Prime Day shopping event on Tuesday.  Shares of the retailing giant were trading up 0.071 percent.

And shares of Apple were down 1.04 percent ahead of the iPhone maker’s highly anticipated launch event on Tuesday.



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US debt projected to balloon to more than double GDP by 2051 | Debt News

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The non-partisan Congressional Budget Office warned that by 2051, the United States’ debt will skyrocket to 202 percent of its gross domestic product, up from 102 percent this year.

The U.S. federal debt will grow to more than double the size of the economy in three decades, increasing the risk of a fiscal crisis even though dangers appear low in the near term, the Congressional Budget Office said.

Debt will be equivalent to 202% of gross domestic product by 2051 from 102% this year, the nonpartisan arm of the legislature said Thursday in its long-term budget outlook. Its projection for 195% in 2050 was unchanged from the prior report, whose forecasts ran through that year.

Net interest payments on the debt are expected to remain relatively low for the next decade, then rise rapidly over the following 20 years, the CBO said. The agency projects 10-year Treasury yield, after inflation, at 2.6% in 2050. The nominal yield was at 1.54%, near the highest in more than a year, on Thursday.

The CBO also said that the two Social Security trust funds, for seniors and people with disabilities, will be exhausted later than the agency projected last year.

The report — which doesn’t reflect the $1.9 trillion stimulus plan currently working its way through Congress — follows the selloff in Treasuries over the past week that sent yields spiking. Investors are gaining more confidence that rates will move up, with U.S. growth and the labor market set for a stronger-than-expected uptick as vaccines roll out and states lift restrictions.

The CBO outlook’s debt projections will likely underpin already-firm opposition by Republicans to the relief plan, and could also concern some Democratic lawmakers as President Joe Biden prepares a followup multitrillion-dollar plan to build infrastructure and boost the economy in other ways.

“The risk of a fiscal crisis appears to be low in the short run despite the higher deficits and debt stemming from the pandemic,” the CBO said in the report. “Nonetheless, the much higher debt over time would raise the risk of a fiscal crisis in the years ahead.”

Federal Reserve Chairman Jerome Powell said Thursday that the U.S. economy still has a long way to go before the central bank considers tightening, and underscored that the low-inflation world of the past several decades is unlikely to change.



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