Stock Market Desk: Global stocks slumped Friday after a study into a potential coronavirus treatment was halted following inconclusive results.
South Korea’s Kospi Index (KOSPI) fell 1.4% in afternoon trade, while Japan’s Nikkei 225 (N225) slid 0.9%. China’s Shanghai Composite (SHCOMP) was down about 1%. Hong Kong’s Hang Seng Index (HSI) dipped 0.4%.
Dow (INDU) futures were slightly lower, after the index closed in the green Thursday. S&P 500 (SPX) futures dropped 0.3% and Nasdaq (COMP) futures were down about 0.5%.
Asia’s major indexes were already struggling this week as countries released dismal economic data and as an historic oil price crash roiled markets.
Now, they’re poised to close out their first week in negative territory since early April after drug maker Gilead (GILD) said it terminated a trial of Remdesivir early, and thus had no conclusive findings about its effectiveness in treating Covid-19. Shares in the company closed down 4.3% on Wall Street on Thursday.
A screenshot of the study description posted to the World Health Organization’s website was published by STAT on Thursday. The description in the screenshot notes that the study, which involved 237 patients, found “Remdesivir use was not associated with a difference in time to clinical improvement” and “in this study of hospitalized adult patients with severe Covid-19 that was terminated prematurely, Remdesivir was not associated with clinical or virological benefits.”
Gilead said in a statement Thursday that information about the study was prematurely posted on the WHO website. The company said the “study was terminated early due to low enrollment and, as a result, it was underpowered to enable statistically meaningful conclusions.”
Finding effective treatments and vaccines for the disease could allow governments to lift tough restrictions on social interaction and travel, and accelerate economic recovery.
But progress in combating Covid-19 “is not the same as returning the economy to the place it was last fall,” said Hannah Anderson, a market strategist for J.P. Morgan Asset Management. She added that “investors should expect more volatility across all asset classes as we try to appropriately price in something we have never experienced before.”
Poor economic data has also sowed concerns among investors. US weekly jobless claims topped 4.4 million, a decline from previous weekly reports, with the 5-week total reaching 26.5 million. New homes sales also plunged in March. Sales of newly built single-family homes plummeted 15.4% in March, totaling just 627,000 last month, according to data from the Census Bureau and the Department of Housing and Urban Development. Analysts say new home sales activity could drop even further when April figures are reported due to widespread shutdowns onset by coronavirus.
