Biotech Hammered–Here’s Why
Stocks are consolidating three
days of gains with the Biotech sector in focus as an MS drug is withdrawn.
Biogen Idec
(
BIIB |
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PowerRating) and Elan
(
ELN |
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their MS drug Tysabri because of adverse events. A patient taking the drug died
recently. ELN is down 68% and BIIB is down 20%. Teva Pharmaceuticals
(
TEVA |
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PowerRating) and Serono
(
SRA |
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PowerRating) make competing drugs.
General Motors
(
GM |
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PowerRating) and Ford
(
F |
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at Bank of America.
Federated Department Stores
(
FD |
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PowerRating) will buy May Department Stores
(
MAY |
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PowerRating) for $11 billion. The deal, which values May at $35.50, creates the
largest US department store chain.
Yellow Roadway is buying USF Corp. for $1.37 billion in cash
and stock.
January personal income fell -2.3%; personal
spending was unchanged. The Chicago PMI came in at 62.7 for February vs. 62.4 in
January. New home sales fell 9.2% in January to an annual rate of 1.106 million
units.
Trader talk: M&A activity continues, there appears to be confidence in the
boardroom, the rally continues in energy and metals stocks, which have pricing
power. For the month of February, energy stocks rose +18.3%, steel stocks rose
14% and metals stocks rose +12.5%.
In the Nasdaq for February, the SOX rose 10%, INTCÂ was +8.5%, AMAT
+12%. AMZN was the big ls=oser at -18%. Short interest in Nasdaq shares rose 6%
in February. The VIX is at a 20-year low.
Strong sectors are:Â Transports Â
(
$TRANX.X |
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+1.05%Â Â Internet
(
$GIN.X |
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PowerRating) +0.80%Â Â
Hardware
(
$HWI.X |
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PowerRating) +0.59%
Weak sectors are: Biotech
(
$BTK.X |
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PowerRating)
-4.76%Â Insurance
(
$IUX.X |
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PowerRating) -1.25%Â Â
Dow | -49.06 | 10,792.54 |
Nasdaq | -9.34 | 2056.06 |
S&P 500 | -5.10 | 1206.27 |
The dollar is -0.28 at
82.38
Crude Oil is +0.31 at
51.80
Gold is -0.70 to 436
ce=”Arial” size=”2″ face=”Arial”>Volume is 1.5 billion on the NYSE and
1.7 billion on the Nasdaq.
Market breadth is negative.
NYSE | Issues | |
Advancing | 1543 | Up Vol 217 |
Declining | 1608 | Down Vol 353 |
1.04 | 1.62 | |
Nasdaq |
||
Advancing | 1222 | Up Vol 465 |
Declining | 1705 | Down Vol 365 |
1.39 | 1.27 |
Stocks in the News
Tiffany
(
TIF |
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PowerRating) beat by 0.02, but sees a lower Q1.
Wal-Mart
(
WMT |
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PowerRating) sees February sales up 4%
Heinz
(
HNZ |
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PowerRating) beat by a penny.
Brice Wightman