Stocks Weaker, Led by High-Beta Names
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After starting flat-to-modestly higher, all major stock indicies are lower heading into the noon hour. Leading the downside is the NASDAQ, as high-beta names get sold hard.
The Dow is down 55 points (-0.3%), the S&P 500 is down 12 points (0.7%) and the Nasdaq is down 71 points (-1.7%).
Looking across high-beta names. the weakness is evident - Tesla (NASDAQ: TSLA) is down 5.6%, Netflix, Inc. (NASDAQ: NFLX) is down 7%, Twitter, Inc. (NYSE: TWTR) is down 4.8%, Facebook (NASDAQ: FB) is down 4.5%, and Intercept Pharmaceuticals (NASDAQ: ICPT) is down 9%.
The biotech index is also notably weaker, although weakness in the sector started over the past week or so. Illustrating the biotech weakness, iShares Nasdaq Biotechnology (NASDAQ: IBB) is down 3.6%. BMO Capital analyst notes the biotech weakness was driven by both "risk-off" market behavior and more biotech-specific concerns on government scrutiny of SOVALDI pricing and safety concerns about Intercept Pharmaceuticals (NASDAQ: ICPT) NASH drug, OCA. However, he sees the recent weakness as a buying opportunity as "valuations appear attractive with large-cap bellweathers like GILD trading at about 13x forward EPS and with an EPS CAGR of more than 20%, an opportunity for upward EPS revisions across the group, and multiple transformational pipeline opportunities in 2014."
The Dow is down 55 points (-0.3%), the S&P 500 is down 12 points (0.7%) and the Nasdaq is down 71 points (-1.7%).
Looking across high-beta names. the weakness is evident - Tesla (NASDAQ: TSLA) is down 5.6%, Netflix, Inc. (NASDAQ: NFLX) is down 7%, Twitter, Inc. (NYSE: TWTR) is down 4.8%, Facebook (NASDAQ: FB) is down 4.5%, and Intercept Pharmaceuticals (NASDAQ: ICPT) is down 9%.
The biotech index is also notably weaker, although weakness in the sector started over the past week or so. Illustrating the biotech weakness, iShares Nasdaq Biotechnology (NASDAQ: IBB) is down 3.6%. BMO Capital analyst notes the biotech weakness was driven by both "risk-off" market behavior and more biotech-specific concerns on government scrutiny of SOVALDI pricing and safety concerns about Intercept Pharmaceuticals (NASDAQ: ICPT) NASH drug, OCA. However, he sees the recent weakness as a buying opportunity as "valuations appear attractive with large-cap bellweathers like GILD trading at about 13x forward EPS and with an EPS CAGR of more than 20%, an opportunity for upward EPS revisions across the group, and multiple transformational pipeline opportunities in 2014."
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