Bad Day For Drug Stocks–Here’s Why
Weak drug stocks dragged the
Dow down to the 50-day moving average today.
An editorial by a cardiologist in the New England Journal of Medicine
questioned the safety of Merck’s VIOXX and the FDA’s monitoring of drugs.
The editorial also calls into question Pfizer’s Celebrex, a member of the
same COX-2 inhibitor class. Merck traded down 2.3%; Pfizer traded down 3.81% and
traded over 70 million shares, making a 52-week low. Celebrex was expected to
generate $3 billion in sales for Pfizer this year. Late in the day, a unit of
Johnson & Johnson
(
JNJ |
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Chart |
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PowerRating) warned of lymphoma risk by using Remicade.
Jobless claims fell by 37,000 last week to
335,000, the first decline in four weeks.
Oil prices hit $53 before pulling back slightly.
It was the sixth record high in two weeks.
Wal-Mart
(
WMT |
Quote |
Chart |
News |
PowerRating) posted a 2.4% gain in
same store sales, at the low end of the range. Gap
(
GPS |
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PowerRating) same store
sales fell 3% for September. Pier One
(
PIR |
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PowerRating) said September sales fell
3.9% and the company forecast further declines.
IPO IntraLase
(
ILSE |
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Chart |
News |
PowerRating) was priced at
$13 and closed at $16.41; the company makes equipment for Lasik surgery. Retail
operator New York & Co.
(
NWY |
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Chart |
News |
PowerRating) was priced at $17, and closed at
$19.55.
After the close, Alcoa
(
AA |
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Chart |
News |
PowerRating) reported 0.34. in-line, although revenues
were less than expected, at $5.975 billion. AT&T
(
T |
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Chart |
News |
PowerRating) will take a $11.4
billion restructuring charge. Advanced Micro Devices
(
AMD |
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Chart |
News |
PowerRating) reported
0.12, in-line, with slightly lower revenues.
Tomorrow, look for earnings from GE–the estimate
is 0.38; the September jobs report–the Briefing forecast is 155K–as well as
the 2nd presidential debate.
| Dow | -114.74 | 10125.18 |
| S&P 500 | -6.22 | 1133.83 |
| Nasdaq | -22.51 | 1948.52 |
 Weak sectors were:
Biotech
(
BTK.X |
Quote |
Chart |
News |
PowerRating) -3.51%, Insurance
(
IUX.X |
Quote |
Chart |
News |
PowerRating) -1.69%.
There were no green sectors.
10-year Notes were -050 at 111 250
The dollar
was -0.13 at 88.39
Gold was -0.50 at 417.60
Crude Oil was +0.58 at 52.60.
1.72 billion on the Nasdaq.
Market breadth was negative.
| NYSE | Issues | |
| Advancing | 887 | Up Vol 316 |
| Declining | 2383 | Down Vol 1007 |
| Ratio | 2.68 | 3.18 |
| Nasdaq |
||
| Advancing | 918 | Up Vol 667 |
| Declining | 2161 | Down Vol 988 |
| Ratio | 2.35 | 1.48 |
Stocks in the News
Costco
(
COST |
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Chart |
News |
PowerRating) reported a higher quarterly profit.
Genentech’s
(
DNA |
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Chart |
News |
PowerRating) Q3 profit rose 58%.
Marriot
(
MAR |
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Chart |
News |
PowerRating) said Q3 profit rose 45%.
Bank of America
(
BAC |
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Chart |
News |
PowerRating) said it will cut 4500 jobs.
Isis Pharmaceuticals
(
ISIS |
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Chart |
News |
PowerRating) won three government contracts worth up
to $10 million.
Corning
(
GLW |
Quote |
Chart |
News |
PowerRating) said it will take a Q3 charge of $2.8 billion.
Magma Design Automation
(
LAVA |
Quote |
Chart |
News |
PowerRating) said orders for Q2 would be lower
than expected.
Pixelworks
(
PXLW |
Quote |
Chart |
News |
PowerRating) cut its Q3 revenue outlook.
Starbucks
(
SBUX |
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Chart |
News |
PowerRating) posted a September same store sales increase of 7%,
the smallest increase since May, citing hurricanes.
West Marine
(
WMAR |
Quote |
Chart |
News |
PowerRating) cut its Q3 outlook.
Brice Wightman