Approval of new pills for COVID-19 treatment gives stocks a boost – Detroit Free Press

The S&P 500 traded higher in a holiday-shortened week as investors got some good news on the pandemic front.

COVID-19 models are projecting a surge in global cases in the next three months, but the U.S. Food & Drug administration approved two more antiviral pills from Merck and Pfizer for emergency use in treating COVID-19.

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In addition, new data on the omicron variant from South Africa, England and Scotland suggest people infected with the omicron strain are significantly less likely to require hospitalization than those who contracted earlier strains.

Goldman Sachs cut its 2022 U.S. GDP growth estimate last week after  U.S. Sen. Joe Manchin, D-W.Va., pulled his support for President Joe Biden’s Build Back Better plan. In response to the failure of the climate and social spending bill, Goldman reduced its first-quarter 2022 U.S. GDP growth forecast from 3% to 2%. 

On Thursday, the Commerce Department reported the Personal Consumption Expenditures Price Index (PCE), a popular measure of inflation, increased by 5.7% in November, the highest level of U.S. inflation recorded since July 1982. Excluding volatile food and energy prices, the PCE was up 4.7% in the month, its largest increase since September 1983.

Shares of electric truck stock Nikola dropped 5% last week after the company agreed to a $125 million fraud settlement with the U.S. Securities and Exchange Commission related to charges it misled investors about its products and technical capacity. Nikola founder Trevor Milton stepped down from his position as CEO in September 2020 after a short seller accused the company of making “an ocean of lies” about its products.

Rite Aid sees gains

Shares of drugstore chain Rite Aid gained more than 14% last week on the strength of better-than-expected earnings guidance and a new plan to close 63 underperforming stores.

In the week ahead, investors will get more earnings reports from ADDvantage Technologies on Monday, Cal-Maine Foods on Tuesday and FuelCell Energy on Wednesday.

S&P 500 companies are on track to report 45.1% earnings growth in 2021, the highest earnings growth rate since at least 2008, according to FactSet.

Economic numbers

Following another batch of elevated inflation numbers, Wall Street will get more economic updates on Wednesday when the National Association of Realtors releases its November U.S. Pending Home Sales report and on Friday when the China Federation of Logistics and Purchasing releases its December Manufacturing Purchasing Managers Index reading.

Benzinga is a financial news and data company headquartered in Detroit.