By Ciara Linnane, MarketWatch
Separately, the National Institutes of Health will conduct a randomized, controlled clinical trial testing a combination of remdesivir with Merck KGaA’s /zigman2/quotes/200605022/delayed DE:MRK -0.88% interferon beta-1a as a treatment for COVID-19 patients.
The study plans to enroll 1,000 people who have been hospitalized because of a COVID-19 infection. The federal agency said it expects to have preliminary results in the fall.
The trial is one of several that have been initiated to pair the investigational therapy with other drugs to see if the combination can better treat severely ill COVID-19 patients. The list includes an NIH trial pairing remdesivir with Eli Lilly & Co. /zigman2/quotes/200106384/composite LLY -1.65% and Incyte Corp.’s /zigman2/quotes/204510994/composite INCY +1.00% Olumiant.
What’s the economy saying?
The torrid pace of U.S. employment growth in the late spring gave way in July to a sharp slowdown in hiring, underscoring the fragile nature of a recovery with the coronavirus still running rampant in many states, MarketWatch’s Jeffry Bartash reported.
The economy recaptured 1.76 million jobs last month, just one-third of the revised 4.79 million gain in June. The official unemployment rate, meanwhile, fell for the third month in a row to 10.2% from 11.1%, the government said Friday.
The increase in new jobs was slightly above the 1.68 million anticipated by a MarketWatch-compiled forecast.
The smaller increase in job creation took place against the backdrop of surge in coronavirus cases in a number of states, including California, Texas and Florida. Some restrictions on businesses were reimposed, and Americans showed more caution in where they went and what they did.
The U.S. shed more than 22 million jobs at the height of the pandemic. So far it’s restored about 9.3 million, leaving well more than half of the Americans who lost their jobs in the lurch.
“The economic outlook deteriorated markedly from the middle to the end of July as consumers became less willing to spend money, and businesses grew increasingly uncertain about the demand for their goods,” said economist John Leer at Morning Consult. “As a result, the current employment situation is likely weaker than these numbers indicate.”
What are companies saying?
Disney Loses Nearly $5 Billion Amid Pandemic
Walt Disney Co. posted its first quarterly loss since 2001, as the coronavirus pandemic slammed its theme parks and film productions. WSJ’s R.T. Watson explains why investors still seem optimistic. Photo: Matt Stroshane/Getty Images
• Datadog Inc. /zigman2/quotes/214127379/composite DDOG +1.48% , a cloud monitoring software company, reported second-quarter adjusted earnings and sales above Wall Street expectations and said its customers are under “business pressures” due to the pandemic. “While the current macro environment has caused business pressures for our customers, we expect it to accelerate digital transformation and cloud migration over the long-term,” Chief Executive Olivier Pomel said in a statement. “We continue to execute on our strategic priorities to position for the long-term, including rapid product innovation and expansion of our go-to-market.” Datadog, which had an initial public offering in August 2019, said it expects third-quarter revenue between $143 million and $145 million, and an adjusted EPS between break-even and 1 cent. For the full year, the company called for revenue between $566 million and $572 million, and adjusted EPS between 11 cents and 13 cents.
• Designer Brands Inc. /zigman2/quotes/204656556/composite DBI -2.87% , owner of shoe retailers including DSW Designer Shoe Warehouse, is taking steps to bolster liquidity, including replacing a $400 million revolving credit facility with an equally-sized, asset-based revolving credit facility, as well as a $250 million privately placed senior secured term loan. “Since confronted with the challenges posed by COVID-19, we have acted decisively to prioritize the health and safety of our associates and customers and protect the long-term sustainability of our business,” Chief Executive Roger Rawlins said in a statement. “Today’s announcement represents another critical step that increases our financial flexibility and total liquidity.” The company reorganized and cut staff in July impacting more than 1,000 positions, or about 8% of its North American work force..
• Dish Network Corp. /zigman2/quotes/207505872/composite DISH -2.72% posted better-than-expected second-quarter earnings estimates. Dish TV net subscribers fell by about 40,000 in the quarter, while Sling TV subscribers fell about 56,000. “The COVID-19 pandemic has caused significant disruption in certain commercial segments served by DISH, including the hospitality and airline industries,” the company said. Dish paused service on about 250,000 commercial accounts in the first quarter and removed them from its subscriber count. In the second quarter, about 45,000 of those accounts resumed normal service. The company ended the quarter with 11.27 pay-TV subscribers, including 9.02 million Dish TV subscribers and 2.25 million Sling TV subscribers.
•Dropbox Inc. /zigman2/quotes/205896836/composite DBX -0.24% reported second-quarter revenue that was in line with Wall Street estimates, underscoring the need for Dropbox’s technology among millions of Americans working from home during the pandemic. Dropbox reported net income of $17.5 million, or 4 cents a share, compared with a loss of $21.4 million, or 5 cents a share, in the year-ago quarter. Adjusting for stock-based compensation and other factors, Dropbox reported net income of 22 cents a share, compared with 10 cents a year ago. Revenue improved 16% to $476.4 million from $401.5 million a year ago. Analysts surveyed by FactSet had expected adjusted net income of 17 cents a share on sales of $465 million.
• Eventbrite Inc. /zigman2/quotes/208043748/composite EB -1.33% , the event-management services company posted second-quarter earnings that beat Wall Street estimates but a sharp decline in revenue, reflecting the devastating impact coronavirus has had on live entertainment. The company’s expense reduction plan, announced in April, “remains on track to yield at least $100 million in annualized expense savings by the fourth quarter of this year.”
• Illumina Inc. /zigman2/quotes/203509482/composite ILMN +0.18% reported second-quarter results that were shy of Wall Street expectations, saying that many of its research clients remained closed due to the pandemic. “As expected, the second quarter was significantly impacted by pandemic-related disruption in our customers’ operations and was particularly challenging for many of our research customers who remain closed or operating at limited scale,” Chief Executive Francis DeSouza said in a statement. Illumina said it continues to forgo fiscal 2020 guidance “due to the uncertainties around the severity and duration of the COVID-19 pandemic.” It ended the quarter with free cash flow of $202 million, compared with $96 million in the second quarter of 2019.
• Trade Desk Inc. /zigman2/quotes/207508089/composite TTD -2.03% , an advertising technology company, reported results and provided an outlook that exceeded Wall Street expectations. “While the advertising industry hit the pause button early in the second quarter due to uncertainty around the COVID-19 pandemic, we saw substantial improvement in ad spend as the quarter progressed,” said Jeff Green, Trade Desk chief executive, in a statement. Trade Desk expects third-quarter revenue of $177 million to $181 million, while analysts had forecast revenue of $158.7 million.
• Uber Technologies Inc. /zigman2/quotes/211348248/composite UBER 0.00% posted another quarterly loss of more than $1 billion Thursday as the COVID-19 crisis took a toll on its core ride-hailing business, which was actually surpassed by Uber’s food-delivery business. The company’s results fell short of Wall Street’s expectations on the bottom line, but revenue actually held up better than analysts projected. Uber’s ride-hailing business has taken a huge hit. Gross bookings fell 35% to $10.2 billion, but bookings within the “mobility” segment fell more steeply at 73%, and ride-hailing revenue plunged 67% from last year to $790 million. Chief Executive Dara Khosrowshahi described the ride-hailing business as “a tale of 10,000 cities” in a conference call, saying that cities in Asia and Europe are bouncing back while the U.S. is struggling. “Our Mobility recovery is clearly dependent on the public health situation in any given area,” he said.
• Zillow Group Inc. /zigman2/quotes/204413973/composite Z +2.86% reported second-quarter revenue that was well above Wall Street expectations and said work-from-home trends during the pandemic have led more people to think about moving. “Zillow’s second-quarter results are even better than we had hoped, and firm up our belief that powerful tailwinds in both real estate and technology are rapidly converging, with Zillow at the nexus,” Chief Executive Rich Barton said in a statement. The pandemic and work-from-home policies “are inspiring people to rethink their homes and consider moving,” he said. Zillow said it ended the quarter with the highest cash balance in its history, or cash and investments growing to $3.5 billion from $2.6 billion at the end of first quarter. Its home buying and selling business started the quarter with home acquisitions temporarily paused due to market uncertainty, but it has resumed buying and selling homes, ending the quarter with 440 homes in inventory, the company said. “Zillow Offers is now actively purchasing homes in all 24 markets where it previously operated,” it said.