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days of gains with the Biotech sector in focus as an MS drug is withdrawn.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
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and Elan
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said they will suspend
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
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and Serono
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make competing drugs.

General Motors
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and Ford
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were downgraded to ‘sell’
at Bank of America.

Federated Department Stores
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FD |
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will buy May Department Stores
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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%, INTC  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:  Transports  
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$TRANX.X |
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+1.05%   Internet
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$GIN.X |
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+0.80%  
Hardware

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+0.59%

Weak sectors are: Biotech
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-4.76%  Insurance
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-1.25%  

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
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TIF |
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beat by 0.02, but sees a lower Q1.

Wal-Mart
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sees February sales up 4%

Heinz
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beat by a penny.

Brice Wightman