The stock market continued to move lower on Friday, extending losses from Thursday as investors grew more concerned about the possibility of tighter monetary policy from the Federal Reserve. Suddenly, market participants who had thought that the Fed might stop raising interest rates entirely now seem to believe that larger rate hikes could come in the short run, potentially bringing about a deeper recession later in 2023. The Dow Jones Industrial Average (^DJI -0.12%) actually held up reasonably well, but the broader market was lower early Friday.
A couple of stocks showed the cross-currents running through the stock market on Friday. Shares of Moderna (MRNA -0.34%) moved lower after the biotech giant released information about a key clinical study that has implications for the future of its business strategy. In addition, DoorDash (DASH -2.20%), which serves restaurant patrons with food delivery, saw its stock swing from early gains to later losses even as it performed better than many had expected in its latest quarterly results.
Moderna sees mixed results
Shares of Moderna were down 5% on Friday morning. The vaccine maker had hoped to see unequivocally good news from a trial of its flu vaccine, but mixed performance left shareholders less certain about the company's strategy of expanding mRNA vaccines beyond COVID-19.
Moderna's interim results from its phase 3 safety and immunogenicity trial for its mRNA-1010 seasonal influenza vaccine candidate included substantial data that was encouraging. Several measures of immune response to influenza A strains (including influenza A/H1N1 and A/H3N2) showed superior or noninferior performance to the control vaccine. However, the endpoints for two influenza B strains, B/Victoria and B/Yamagata, failed to establish noninferiority in comparison to the control.
Moderna tried to put a positive spin on the results, noting that influenza A is responsible for the vast majority of flu in older adults. Moreover, it has already made updates to the vaccine that could help it improve immune response in fighting influenza B strains.
Nevertheless, the study was a partial setback in Moderna's long-term strategy of establishing a wide stable of mRNA-based vaccines for fighting a variety of different diseases. Investors have counted on Moderna's success to ensure that the company has a long-term future beyond COVID-19, and they'll want to see more favorable results from future studies in order to regain their full confidence in the biotech stock.
DoorDash stock gets dashed
Meanwhile, shares of DoorDash were 4% lower early Friday. The food delivery company reported fourth-quarter financial results that initially made investors more confident about the sustainability of its business, but sentiment turned negative later in the morning.
DoorDash saw impressive performance in many of its key metrics. Total order counts rose 27% year over year to 467 million, with the marketplace for ordering recording $14.4 billion in gross order value, up 29% from year-ago levels. That helped boost revenue by 40% to $1.82 billion, and while the company lost money, DoorDash did post positive adjusted pre-tax operating earnings of $117 million. That figure was more than double what DoorDash saw in the fourth quarter of 2021.
The company attributed its success to the consistent work it has done to improve the consumer experience. Many expected to see demand for DoorDash services fall as the impacts of the COVID-19 pandemic faded, but the delivery specialist has worked hard to reduce delivery times, eliminate extremely late deliveries, and boost the reliability of its website. It has even been able to reduce average transaction fees while still keeping sales moving higher.
Bullish investors believe that DoorDash can build its nonrestaurant delivery business to get more market share in deliveries of groceries and other consumer goods, but bears fear that a recession could make it harder for DoorDash to get business. Making its platform more consumer-friendly is a key element of DoorDash's long-term plans.
