How Low Can Biotech Go?

The stock market followed through to the downside, early Wednesday, raising the hopes of those on the short side. The turnaround caught many by surprise as the somewhat-optimistic economic outlook from Fed Chair Janet Yellen helped boost the market.

It still was a mixed close as the Nasdaq Composite (COMP) was down 0.32% while the Spyder Trust (SPY) that tracks the S&P 500, gained 0.59%. The Internet stocks continued to get hit hard, but in the broad market, there were twice as many advancing stocks as there were declining ones.

It has been a rough couple of months for the stock market as the wide trading range and sharp swings up and down have made it tough for both traders and investors. The earnings season has made it even worse as it has accentuated the volatility. There have been a number of stocks that beat earnings estimates but were still hit by selling.

Biotechnology has been one of the casualties as the Dow Jones Biotechnology Index (DJUSBT) was down over 20% at the mid-April lows. The question now is whether the sector has made its lows or if the biotech stocks are vulnerable to another wave of selling?
(more)
Please share this article