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Kodak shares soar 500 percent after federal government loan for drug manufacturing

Kodak shares soar 500 percent after federal government loan for drug manufacturing
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Shares of Eastman Kodak soared early Wednesday after the federal government announced that the iconic camera maker would receive a loan to open pharmaceutical factories in the U.S.

Kodak stock rose as much as 500 percent on Wednesday, forcing the New York Stock Exchange to halt trading of the company’s shares several times after they vaulted from $8 to as high as $53. The share price dropped back down to roughly $20 shortly before 11 a.m.

The U.S International Development Finance Corp. announced Tuesday that it would lend Kodak $765 million to launch Kodak Pharmaceuticals. The loan will be furnished under the Defense Production Act (DPA), a 1950 law that gives the president the authority to order private-sector companies to produce goods and equipment crucial to national defense.

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President TrumpDonald John TrumpVenezuela judge orders prison time for 6 American oil executives Trump says he'll leave White House if Biden declared winner of Electoral College The Memo: Biden faces tough road on pledge to heal nation MORE invoked the DPA in April to produce protective gear, ventilators and other materials needed to fight the coronavirus pandemic. The president said Wednesday that the loan to Kodak will be a crucial step toward shifting the U.S. pharmaceutical supply chain from nations such as China to domestic factories, an issue under growing attention amid the pandemic.

Kodak’s gains came during a tepid opening for the market as a whole. The Dow Jones Industrial Average, S&P 500 and Nasdaq composite all opened with gains of less than 1 percent.

Investors will be closely watching Federal Reserve Chairman Jerome Powell on Wednesday afternoon when the Fed chief holds a press conference following the bank’s July interest rate announcement. The Fed is expected to keep its baseline interest rate range at zero to 0.25 percent while pledging to continue asset purchases and emergency lending programs as long as the economy requires it. 

Updated at 10:58 a.m.