When the S&P 500 index futures are deep in the red following a bad session in the previous session, it does not take much to incite an explosive rally.
Case in point, the announcement by Merck & Co. (NYSE: MRK), that it has developed a pill that significantly reduces hospitalization for the non-vaccinated that have been stricken with Covid-19.
Although it took premarket traders some time to digest the information, the result was a significant rebound to end the week. Whether it was the Merck news or beginning-of-month asset allocation by funds with fresh cash on their hands, the price action in the index has both the bulls and the bears confused.
To perfectly illustrate the precarious state of the index to start the quarter, one only has to observe the closes from Wednesday and Friday. In Wednesday’s back and forth session, the index added six handles to close at 4349.75. After Thursday’s 52 handle beatdown, the index nearly recouped all of Thursday’s losses, gaining back 46.25 handles to close at 4344.
However, for the week, the index was lower by a significant amount of 100 handles.
Alphabet Inc (NASDAQ: GOOG) was the biggest gainer of the top components. The issue snapped a four-day streak adding $63.94 or 2.4 percent at $2729.26.
Johnson & Johnson (NYSE: JNJ) was under pressure along with much of the healthcare industry, except for Merck. The issue made a new seven-month low closing lower by $1.03 or .90% at $160.47.