Investors are getting hit on all sides by news that raises big concerns, and stocks haven't been able to inspire much confidence from traders on Wall Street. The Nasdaq Composite (^IXIC 0.10%) is now back to being down more than 20% from its highs, with a drop of more than 2% at 1:45 p.m. ET that shows just how little conviction many investors have in high-growth stocks right now.
However, some stocks in the Nasdaq managed to hold up well even in Monday's decline. Moderna (MRNA 0.89%) was once again a beneficiary of troubling news on the health front, this time from China. Meanwhile, investors continued to look for safe havens, and that helped consumer products giant PepsiCo (PEP 3.62%) maintain a modest gain Monday afternoon.
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China's COVID-19 cases boost vaccine stocks
Shares of Moderna were up more than 11% on Monday afternoon. The vaccine maker wasn't alone, with BioNTech seeing gains of more than 12%.
The news that was behind the upward move for vaccine stocks came from China, where an outbreak of the omicron variant of COVID-19 has prompted government officials to impose new lockdown measures and travel restrictions. More than 1,300 cases have appeared, with the majority coming from the northeastern province of Jilin. In addition, the city of Shenzhen has seen new cases, prompting a lockdown of the city. Even though the number of cases is relatively small, China has been adamant in following its zero-COVID policy.
Even more troubling is the fact that many of these cases involve a new subvariant of omicron that shows signs of being more transmissible and more harmful for those who become infected. It's unknown how well Moderna and BioNTech's vaccines will protect against this "stealth omicron" variant, but investors believe the companies can work to potentially refine their vaccines over time.
Meanwhile, Moderna announced a study with the goal of making a vaccine to protect people against HIV. Such a breakthrough would show that Moderna isn't a one-trick pony and prove once and for all the efficacy of its mRNA technology.
Pepsi is fizzing higher
Elsewhere, shares of PepsiCo were up a more modest 2%. The soft drink and snack foods manufacturer has traditionally had some defensive characteristics that make it an attractive investment for those seeking shelter from tough market environments.
PepsiCo has become a staple for millions of consumers around the world, and its brand name strength gives it a competitive advantage over many smaller companies in the food and beverage space. With many consumers devoted to its brands, PepsiCo is better able to pass on any cost increases in the ingredients that go into its products. That helps PepsiCo sustain its profit margin even when rival companies have to suffer declining earnings.
Dividend investors also appreciate PepsiCo. The stock yields 2.8% currently, and the company has an impressive streak of consistently boosting the amount of its quarterly dividend payments that dates back for decades.
Perhaps best of all, PepsiCo hasn't been afraid to set trends rather than reacting to them. When consumers started demanding healthier options, PepsiCo was among the first major companies to respond aggressively by moving away from sugary soft drinks toward carbonated water and other now-popular beverage alternatives. Similar moves on the snack side of the business have built up even more loyalty for the company.
As inflation hits hard, PepsiCo is in a better position than most to avoid the brunt of higher prices. Stock investors appreciate that kind of protection now more than ever.
