Stock market hammered despite upbeat data

Still another day with investors being unable to decide whether or not they want a recovery when, in spite of a slew of very positive news, the Dow still tanked big time to the tune of 195 points.  Jobless benefits reaching a 15-year low this week was just one of the many indicators that surfaced today to point to a continuing recovery.  Thus the question was also once again raised that maybe interest rates will be raised sooner rather than later.  Apple also dragged the market down after the Apple Watch was reported to be defective.  But doesn't Apple have a very long history of having bumpy intros of its new innovations only to come out smelling like a rose later?  So there was no rational reason for all the panic selling but then no one can argue that this is a rational market of late.  The panic today was a big one with volume way above average at 7.8 billion shares.

Wall St. ends down after Fed statement, GDP data

Today was particularly volatile, with the Dow plummeting 150 points by mid-day only to recover it all by mid-afternoon, and then lose it all again in the last two hours of trading to close 74 points down.  Again, the root cause is the market's inability to decide what it wants from the recovery.  The Fed told investors exactly what they wanted to hear today -- the economy remains sufficiently unstable to warrant a continuing delay in interest rate hikes.  But then the instability became the source for concern and the index dropped again.  Yes, investors really do have to decide what they want.  A recovery means interest rates will ultimately be raised. The market doesn't want that.  But the lack of a recovery means a whole host of bad news on a variety of other issues.  Adding to anxiety was data released today that GDP, due to the harsh winter, has grown at only a 0.2% annualized rate.  Twitter had its second very bad day in a row.  After diving a whopping 24% in one day yesterday, the decline continued to the tune of another 9% today, bringing its combined two-day loss to a very bad 33%.  Everyone was waiting this week for the Fed's report and that turned out to be very positive, yet the market dropped anyway.  With market behavior being so unpredictable, it's no wonder everyone's nervous.  Volume was considerably above average at 7.2 billion shares.

Dow, S&P 500 end up with Merck, IBM; Nasdaq slips with Apple

Another very volatile day, not the least of which because Twitter's stock dropped a whopping 24% after a disappointing report published early in the day.  Even Apple had a bad time of it as, though its numbers were phenomenal, they weren't as great as investors were hoping and their stock price dipped 1.6%.  If that's not enough irrational behavior for the day, despite all the disappointing news the Dow was up 72 points, helped partly by an improving single-family home market.  All our days should be so lousy.  Volume was above average at 6.6 billion shares.

Well, the biotechs have been leading the recent record setting rallies so it makes sense that there would be a correction and that's what happened today with the entire index sinking more than 4% on disappointing reports from several major companies, not the least of which was a catastrophic 80% one-day drop in share price from Celladon Corporation which does experimental gene therapy.  The company's major product failed a critical trial which may now be spelling its doom.  One thing that is very much on investors' minds these days is the horrendous increase in drug prices this past year, something that has aroused so much suspicion that the Congress announced a while back that it was launching an investigation.  I can say from my personal experience that for 20 years I've been taking belladonna which has always been about $7 for a month's supply and it has now skyrocketed to $450 for a month's supply.  Needless, I am trying to get along without it now but am always very glad to hear that somebody is looking in to how this could be happening.  It is actually a relief that this problem is now adversely impacting stock prices so that maybe Wall Street will demand some answers.  The Dow closed down 42 points with 6.8 billion shares traded overall, making it a higher than average day.

Markets | Mon Apr 27, 2015 4:40pm EDT

Wall St. ends down as biotechs drop 4 percent

BY CAROLINE VALETKEVITCH

DJ:    18,037.97  -42.17      NAS:      5,060.25  -31.84          S&P:      2,108.92  -8.77

(Reuters) - U.S. stocks ended down on Monday, led by losses in biotech shares after disappointing news from several companies including Amgen.

The Nasdaq Biotech Index .NBI sank 4.1 percent, its biggest daily percentage loss since March 25, while the S&P Healthcare index .SPXHC, down 1.8 percent, was the biggest drag on the benchmark S&P 500 index.

Amgen shares (AMGN.O) 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 Corp (CLDN.O) 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.

Healthcare 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 (BBC.P) and (BBP.P) 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 selloff in Gilead (GILD.O) 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."

The Dow Jones industrial average .DJI fell 42.17 points, or 0.23 percent, to 18,037.97, theS&P 500 .SPX lost 8.77 points, or 0.41 percent, to 2,108.92 and the Nasdaq Composite.IXIC dropped 31.84 points, or 0.63 percent, to 5,060.25.

Also in the healthcare space, Mylan (MYL.O) fell 5.7 percent to $71.72 after it rejected Teva Pharmaceutical's (TEVA.N) unsolicited $40 billion takeover offer, saying it "grossly undervalues" the company. Teva lost 4.3 percent to $61.63.

The Health Care Select Sector SPDR (XLV.P) exchange-traded fund was down 1.8 percent.

Limiting some of the day's decline, Apple (AAPL.O) shares rose 1.8 percent at $132.65 ahead of its results.

NYSE declining issues outnumbered advancers 1,923 to 1,130, for a 1.70-to-1 ratio; on the Nasdaq, 1,956 issues fell and 805 advanced, for a 2.43-to-1 ratio favoring decliners.

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.

(Note: no volume stats in today’s report but other sources cited 6.8 billion as the number. This is higher than average activity.)  

Succinct Summations of Week’s Events 4.24.15 (& reading list)

Submitted for your consideration, the valued one-page eye shot of the week's happenings in finance.  This Sunday's bonus is the reading list that Barry Ritholtz posted this morning and I am including it tonight since the very first item should be of definite interest to all of us who are active investors.  Hope everyone had a great weekend!  By next weekend we'll know what's up with the dollar.

Music First, Stardom Second

For this weekend something completely different.  As you all know, I split my life between creative pursuits and business.  I have degrees in both film and business and decades of experience in both.  I have been and am a writer, filmmaker, entrepreneur, and financial manager.  I worked in Hollywood for 13 years and spent ten years producing films and videos here in the metro area.  I have spent years working as a manager in the finance departments of both the 40th largest and 16th largest corporations in the United States (in L.A.) and have started and run two small film/video production companies and two non-profits in the 25 years that I've been back here in Michigan.

Tech triumvirate propels Nasdaq, S&P to record highs

Amazon, Google, and Microsoft all reported in glowing Q1 reports way topping expectations and the results were more record highs with the Nasdaq jumping 36 points and the Dow 21 points.  Two weeks ago the prognosticators were saying that Q1 earnings would be down 2.9%.  Today they have changed that prediction to 1.3%.  That number will undoubtedly change again next week when giants Apple, Exxon Mobil, and Chevron chime in giving investors the much anticipated barometer on the strong dollar.  Of course, there's also the Fed which will be meeting once again next week and will be issuing still another update on its policy positions on Wednesday.  At 6.2 billion, volume is again just about average which means investors remain less than enthusiastic and more than a little skeptical about the continuing streams of positive reports.