Dow Jones Gains 300 Points on Jobs Report, Merck Shares Slammed on Pfizer’s COVID Pill Results

The Dow Jones Industrial Average (DJINDICES: ^DJI) It added 330 points, up nearly 1%, in mid-morning trading on November 5, following the release of the October jobs report from the US Department of Labor. According to the survey, employers added 531,000 jobs last month, which is better than expected and an increase in job growth compared to previous months.

This helps to boost many Dow Jones stocks modestly, with visa (NYSE: V) 3% shares, Walt Disney (NYSE: DIS) Shares of 2.7%, and Boeing (NYSE: BA) Shares rose 2.4% as investors remain optimistic about the continued economic recovery.

On the negative side of the ledger, shares Merck & Co (NYSE: MRK) It fell about 9% after data from competing COVID-19 pills showed they were more effective in treating the disease than the treatment recently approved by Merck.

Image source: Getty Images.

Job growth gives investors reason to be optimistic

It seems that the situation of labor shortages may not be as dire as we thought. In addition to beating expectations for October, the Labor Department also updated job numbers for August and September, revising those months up to 483,00 and 312,000 new jobs. Either way, the revised number is more than 100,000 jobs more than the initial estimate, adding nearly 230,000 jobs these two months created more than the initial survey obtained.

As a result, investors send shares of companies that benefit from a strong job market higher. This includes today’s Dow leaders, Visa and Disney, who are directly benefiting more people in the workforce. More people with jobs means more people with disposable income. Joining Visa and Disney is American Express (NYSE: AXP), with stocks up more than 2.3% today in the jobs report.

Boeing and tech giants also moved to the top IBM (NYSE: IBM) And Intel Corporation (NASDAQ: INTC), gaining in expectations of increased consumer and business spending on technology and technical services, along with evidence that transformation efforts in the three are beginning to pay off.

Pfizer’s COVID data is a bitter pill for Merck investors

In early October, investors were excited by Merck’s Lagivreau study data. The oral COVID-19 pills, which will be the first product on the market, showed they halved hospitalizations for COVID-19, sending stocks up more than 10% over the following month:

MRK . scheme

MRK data by YCharts

Today, fellow pharmaceutical giant Pfizer (NYSE: PFE) She announced that her birth control pill, called Paxlovid, was far More effective, it reduces the risk of hospitalization or death for adults at risk of serious illness by 89%. In other words, Pfizer’s pills appear to be more effective than Merck’s pills at controlling severe disease, giving them a huge advantage as a potential treatment of choice for high-risk adults with COVID-19.

The results were so amazing, that the pivotal trial of the drug was terminated early, and she plans to apply for an FDA license soon. Merck had expected to earn $7 billion annually from Lagevrio over the next several years; Pfizer will probably get the lion’s share of that business now.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of Motley Fool’s premium advisory service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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