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Concerns about the efficacy of a potential antiviral drug to treat Covid-19 spoiled stock indexes’ afternoon following a relatively calm morning in the market. Headlines said that an early trial of Gilead Sciences’ antiviral drug remdesivir had flopped.
The Dow Jones Industrial Average closed up 39 points, or 0.2%, after having been up over 400 points in the morning. The S&P 500 and the Nasdaq Composite each dipped less than 0.1% Thursday.
Gilead (GILD) stock ended the day down 4.3%. The health news website STAT quoted a spokeswoman for the company saying that the trial results had mischaracterized the study, which was stopped early because it enrolled an insufficient number of patients. The World Health Organization had accidentally posted the trial results, and then deleted them, according to STAT.
The major stock indexes had rallied prior to the remdesivir news even after the release of figures on initial claims for unemployment benefits showing another week of heavy layoffs.
Some 4.4 million Americans filed for unemployment insurance last week, a touch below economists’ expectations for 4.5 million. About 26 million people have lost their jobs over the past month as the coronavirus pandemic has forced large parts of the economy to shut down.
The price of oil, which plunged earlier this week due to oversupply and a lack of storage space, rebounded partially on Wednesday. That continued on Thursday, with West Texas Intermediate crude oil for June delivery settling up 19.7%, at $16.50 a barrel. Front-month futures for Brent crude, the international benchmark, settled up 4.7% at $21.33 a barrel.
Stock indexes overseas rose as well. Japan’s Nikkei 225 closed up 1.5% and Hong Kong’s Hang Seng index ticked up 0.4%. The Stoxx Europe 600 index rose 0.9% Thursday, while the German DAX gained 0.9%, the French CAC 40 increased 0.9% and the U.K.’s FTSE 100 index added 1%.
Haven assets closed mostly higher on Thursday. Gold prices climbed 0.8% to $1,751.20 an ounce. The yield on the 10-year U.S. Treasury note ticked down less than 1 basis point, or hundredth of a percentage point, to 0.613%, as the price of the securities rose. The U.S. Dollar Index (DXY)—which measures the greenback against a basket of other currencies—rose 0.1%.
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The back-to-back gains in the oil price boosted energy shares on Thursday. Exxon Mobil (XOM) stock climbed 3.1%, Occidental Petroleum (OXY) jumped 6.5%, and Schlumberger (SLB) gained 7.7%.
Other big moves in stocks were largely in response to first-quarter earnings results or newly issued financial forecasts.
Gap (GPS) shares ticked down 0.1% after the clothing retailer said that it suspended rent payments totaling $115 million a month. It is working with landlords to negotiate terms while stores are closed. Gap management warned that its current cash supply may not be sufficient to support operations. Shares were down almost 60% year to date as of the close of trading on Wednesday.
Target (TGT) shares slumped 2.8% after it said that online sales were up, but that customers were buying lower-margin products. That could dent profits in coming quarters.
Eli Lilly (LLY) shares gained 2.1% after the drugmaker’s first-quarter results beat on both the top and bottom line. Sales of its Trulicity diabetes medication soared 40% from a year earlier.
Finally, Blackstone Group (BX) stock jumped 4.5% after the private-equity giant reported a large first-quarter loss but maintained its dividend. Its private equity portfolio fell almost 22% in the period.
Write to Carleton English at carleton.english@dowjones.com