Market Wrap: Wall Street Ends Down as Biotech Stocks Drop 4%
NEW YORK - U.S. stocks ended down Monday, led by losses in biotech shares after disappointing news from several companies including Amgen.
The Nasdaq Biotech Index sank 4.1 percent, its biggest daily percentage loss since March 25, while the S&P Healthcare index, down 1.8 percent, was the biggest drag on the benchmark S&P 500 index.
Amgen (AMGN) shares led the S&P 500's decline, dropping 3.3 percent to $162.38 after U.S. regulators said Amgen's skin cancer immunotherapy cannot be considered for an accelerated review at this time.
Celladon (CLDN) shares fell 80.7 percent to $2.64 and hit a record low of $2.59. It said it expected layoffs and cost cuts after the company's lead experimental gene therapy to treat heart failure failed a key trial.
Health care companies have been the top performers so far in 2015, helping push major stock indexes to records. Biotechs in particular have driven up the Nasdaq, which last week reached its first all-time closing high in 15 years.
The sector is being dragged down by reports of high pricing by specialty pharmaceutical companies as well as the disappointing news from Celladon and Amgen, said Paul Yook portfolio manager of biotech exchange traded funds and at LifeSci Partners in New York.
"Drug pricing has been a real concern for investors," he said.
The Nasdaq biotech sector briefly fell into bear market territory a year ago following a sell-off in Gilead (GILD) shares and concerns about valuations. But analysts said for now they don't view Monday's selloff as the start of a bigger drop. The Nasdaq biotech index is up more than 50 percent since April 2014.
"This run in the biotechs is going to come to end at some point but I'm not panicking yet," said Bill Gunderson, president of Gunderson Capital in San Diego.
"I don't think you can look at what's happening today and say this is the end of the biotech sector. You might just have a big institution reallocating a little bit of money here."
Stocks Making Moves
The Dow Jones industrial average (^DJI) fell 42.17 points, or 0.2 percent, to 18,037.97, the Standard & Poor's 500 index (^GSPC) lost 8.77 points, or 0.4 percent, to 2,108.92 and the Nasdaq composite (^IXIC) dropped 31.84 points, or 0.6 percent, to 5,060.25.
Also in the health care sector, Mylan (MYL) fell 5.7 percent to $71.72 after it rejected Teva Pharmaceutical's unsolicited $40 billion takeover offer, saying it "grossly undervalues" the company. Teva (TEVA) lost 4.3 percent to $61.63.
The Health Care Select Sector SPDR exchange-traded fund (XLV) was down 1.8 percent.
After the bell, Apple (AAPL) shares gained 1.1 percent as the iPhone maker reported a 27 percent jump in quarterly revenue. Its shares ended the regular session up 1.8 percent at $132.65.
NYSE declining issues outnumbered advancers 1,923 to 1,130, while on the Nasdaq, 1,956 issues fell and 805 advanced. The S&P 500 posted 14 new 52-week highs and 1 new low; the Nasdaq composite recorded 101 new highs and 42 new lows.
About 6.8 billion shares changed hands on U.S. exchanges versus the 6.2 billion daily average for the month to date, according to data from BATS Global Markets.
-With additional reporting by Sinead Carew.
What to watch Tuesday:
- Federal Reserve policymakers meet to set interest rates.
- Standard & Poor's releases S&P/Case-Shiller index of home prices for February at 9 a.m. Eastern time.
- The Conference Board releases the Consumer Confidence Index for April at 10 a.m..
These selected companies are scheduled to report quarterly financial results:
- Aetna (AET)
- Aflac (AFL)
- Boston Scientific (BSX)
- BP (BP)
- Bristol-Myers Squibb (BMY)
- Buffalo Wild Wings (BWLD)
- Centene (CNC)
- CIT Group (CIT)
- Coach (COH)
- Corning (GLW)
- Cummins (CMI)
- Ecolab (ECL)
- Edison International (EIX)
- Entergy (ETR)
- Express Scripts (ESRX)
- FirstMerit (FMER)
- Ford Motor Co. (F)
- JetBlue Airways (JBLU)
- Kraft Foods (KRFT)
- Lexmark International (LXK)
- Masco (MAS)
- McGraw Hill Financial (MHFI)
- Merck (MRK)
- NCR (NCR)
- Oshkosh (OSK)
- Panera Bread (PNRA)
- Parker-Hannifin (PH)
- Penske Automotive Group (PAG)
- Pfizer (PFE)
- ServiceMaster Global (SERV)
- Sirius XM (SIRI)
- SuperValu (SVU)
- T-Mobile US (TMUS)
- Tanger Factory Outlet Centers (SKT)
- Tempur Sealy International (TPX)
- Twitter (TWTR)
- U.S. Steel (X)
- United Parcel Service (UPS)
- Valero Energy (VLO)
- Western Digital (WDC)
- Whirlpool (WHR)
- Wyndham Worldwide (WYN)
- Wynn Resorts (WYNN)