Moderna Drops as Soft Vaccine Demand Prompts Guidance Cut

Major U.S. equities indexes moved lower on the first day of August as a pair of reports elevated concerns about the trajectory of the U.S. economy.

The Department of Labor reported a greater-than-expected increase in weekly jobless claims last week, adding to recent signals of a potential softening in the labor market, while the latest Purchasing Mangers’ Index (PMI) data revealed a decline in U.S. manufacturing activity in July.

Thursday’s losses also came as earnings results from big tech names continue to roll in, with Apple (AAPL) and Amazon (AMZN) reporting after the closing bell.

The S&P 500 fell 1.4%, and the Dow lost 1.2%. Underperformance from the tech sector, including steep losses in the semiconductor industry, contributed to a drop of 2.3% for the Nasdaq.

Moderna (MRNA) shares sustained the most severe losses of any S&P stock, plunging 21.0% after the vaccine maker slashed its full-year sales guidance. The biotech firm said slumping demand in Europe would restrain sales of its COVID-19 vaccine and pointed to stiff competition in the market for respiratory vaccines in the U.S. Thursday’s steep losses sent Moderna shares into negative territory for 2024.

Shares of MGM Resorts International (MGM) dropped 13.2% after the casino operator raised red flags about softness in bookings at its hotels for November’s Formula 1 race in Las Vegas. MGM’s CEO noted pre-bookings have not kept pace with last year’s inaugural version of the auto race. Although capitalizing on premium pricing during key events remains a key to the company’s success, MGM did post better-than-expected sales and profit figures in its second-quarter earnings report released yesterday, boosted by a rebound in its Macau business.  

Semiconductor equipment manufacturer Lam Research (LRCX) reported better-than-expected quarterly sales and profit estimates while offering an upbeat outlook for the current period, but its shares lost 9.9%. The stock posted strong gains in the first half of 2024 amid optimism that artificial intelligence (AI) technology will boost demand for Lam’s wafer fabrication equipment, but shares have been trending downward since reaching a record high in July.

Data storage provider Western Digital (WDC) fell short of revenue estimates in its quarterly report, and its shares slipped 9.7%. The company also lowered its revenue guidance for the current quarter. While AI applications have lifted the fortunes of certain memory chipmakers, companies like Western Digital that supply products for conventional data centers have suffered from reduced demand.

C.H. Robinson Worldwide (CHRW) shares notched Thursday’s top performance in the S&P 500, soaring 14.8% following the freight transportation firm’s second-quarter earnings release Wednesday. The logistics company has implemented a new operating model to reduce costs as it navigates the macroeconomic challenges facing the shipping industry, helping it achieve better-than-expected earnings per share (EPS) results. Analysts at BMO Capital reacted favorably to the earnings release, boosting their price target on C.H. Robinson stock.

Strong quarterly results also helped lift shares of FMC Corp. (FMC), which jumped 10.2%. The provider of insecticides, herbicides, and other crop protection solutions exceeded top- and bottom-line forecasts for the second quarter. Improving demand for FMC’s products led to an increase in sales volumes, with particular strength in U.S. and Brazilian markets.

Air Products and Chemicals (APD) shares were up 9.0% after the provider of industrial gases beat EPS forecasts for its fiscal third quarter. The company credited strength in the Americas and Europe as well as pricing and productivity improvements for its strong performance.

Health care laboratory services firm Labcorp Holdings (LH) joined the group of earnings winners, topping second-quarter sales and profit estimates, and its shares added 8.3%. The company benefitted from robust demand for its diagnostic tests and bumped up its full-year revenue forecast.