Stocks opened broadly higher Friday but sold off slowly most of the day, ending near session lows. The S&P 500 was down 0.29% but biotechs hurt the NASDAQ, dipping 0.98%. We’ve been mentioning the weakness of the biotechs the past few weeks as this has been the “go to” momentum group for much of the past 2 years, so it is something to remain aware of. Some attributed today’s late day selling as people lightening up going into a weekend where there is exposure to geopolitical events.
The S&P 500 continues to be in good shape but we are seeing relative weakness in the NASDAQ as biotechs have not been helping of late. This is in stark contrast to the early part of 2014.
The NYSE McClellan Oscillator, after a brief move back into positive territory, is back below 0. So while the indexes are holding up this is showing us some degradation in the quality of the rally.
Gilead Sciences (GILD) was hit as Democrats on the U.S. House Energy & Commerce Committee asked for a briefing from the company on the price of its hepatitis C drug Sovaldi, which costs about $84,000 a patient.
Biogen (BIIB) was likewise smacked, and the entire ETF for the group had a very bad day.
On the positive side Johnson & Johnson (JNJ) had a hepatitis C drug approved by a European regulator.
Nike (NKE) reported weak guidance and that hit the stock quite hard today.
Despite the strong third-quarter results and futures orders, Nike warned that significant currency fluctuations would impact next year’s results. On a conference call, Chief Financial Officer Donald Blair said the devaluation of currencies around the world compared to the U.S. dollar would be “a significant drag on next year’s reported revenue, gross margin and profit growth.”
The company also noted that China, from where it gets a significant portion of its revenue, would be weak this quarter, either unchanged or slightly down.
For fun this weekend – 140 things you didn’t know about Twitter. Have fun watching the basketball games and we’ll see you back here Monday.