Seeking Alpha

Stocks end week on modest high note, biotechs remain volatile

  • Stocks ended with gains but eased off earlier highs, with the Nasdaq barely finishing in positive territory as another steep selloff in biotechs weighed on the index; the top biotech ETF (IBB) slumped 6.8% for the week and 13.5% so far in March.
  • Nasdaq's -2.8% showing for the week was the index's worst in nearly a year and a half; the S&P lost 0.5% loss for the week, while the Dow eked out a gain.
  • The energy sector outperformed for the second straight day, drawing strength from Exxon (+1.5%) while crude oil added 0.4% to $101.67/bbl.
  • Tesla +2.4% after the NHTSA closed its investigation into fire accidents involving its Model S vehicles; several other momentum names, including Priceline and Twitter, rose after getting slammed in recent days.
  • Treasurys ended near their lows after retreating throughout the session; the 10-year yield rose 3 bps to ~2.72%.
Comments (12)
  • ronethpier@gmail.com
    , contributor
    Comments (146) | Send Message
     
    IBB GREAT BUYING OPPORTUNITY
    28 Mar 2014, 07:21 PM Reply Like
  • chopchop0
    , contributor
    Comments (3871) | Send Message
     
    XBI too.

     

    Biotechs are the growth sector in healthcare, the more recession-resistant sector coming out of the great recession
    28 Mar 2014, 08:39 PM Reply Like
  • pagreen1966
    , contributor
    Comments (646) | Send Message
     
    Watch the head and shoulders formation developing in the (IBB). This is usually a self fulfilling prophecy. Hopefully the 200 day moving average will act as support or else it could get nasty!
    29 Mar 2014, 08:18 AM Reply Like
  • al roman
    , contributor
    Comments (9683) | Send Message
     
    It's a matter of perception.But not when it comes to food,fuel,water,heat.The juice that powers the basics.
    A good bio-tech break through would have to be administered like a utility and promise relief from our national health care burden.
    28 Mar 2014, 07:46 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11527) | Send Message
     
    This is yet another very obvious bubble. Tech, biotech, 3D printing, cloud/social media, solar, and oil drillers are all in bubble territory if not the whole market. Look for more mini bubbles to pop before the whole market capitulates to the fact the stock market can not provide decent returns given the risk one is taking owning it right now. The top is being perpetuated simply because there is not much else to put your money as inflation rises, emerging markets fall, and the bond market drops.
    29 Mar 2014, 03:17 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (3489) | Send Message
     
    The oil driller I follow (ESV) has a P/E below 9 and a fwdP/E below 8. I'm struggling to see how that's bubble territory, Moon. Could you clarify?
    29 Mar 2014, 04:37 PM Reply Like
  • buyandhold???
    , contributor
    Comments (907) | Send Message
     
    i don't think I've ever heard moon be bullish on anything....ever

     

    moon would find disdain in the idea of ending world hunger
    30 Mar 2014, 05:44 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11527) | Send Message
     
    Please read my 10,000 posts. I have been bullish, especially around 2009 after the crash. Being in the market long term makes you realize there is something called business cycles. Thus you will see me very positive and very negative. Right now risk does not justify reward for a vast majority of stocks.
    30 Mar 2014, 01:54 PM Reply Like
  • al roman
    , contributor
    Comments (9683) | Send Message
     
    It is just Wisdom.
    31 Mar 2014, 08:49 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (885) | Send Message
     
    >>as inflation rises

     

    What inflation?
    29 Mar 2014, 05:50 AM Reply Like
  • sheldond
    , contributor
    Comments (1251) | Send Message
     
    A pullback is good....government policy involving new drugs getting approval and healthcare overall is bullish for the industry.

     

    The only concern would be regulations stifling the innovation in the industry by not allowing biotech companies to invest in curing diseases that effect millions.

     

    When someone finally cures cancer or HIV or any number of other chronic diseases.......it will be due to the policies and investments of the medical industry, the government, and people like us who put are capital at risk supporting innovative treatments.

     

    Risk in speculative bio is understood but the potential is what should interest you. I would rather select a few (in order to limit risk) underpriced out of favor or upcoming catalyst biotechs and let the beta make you gains.

     

    Or you could buy the IBB group as it might continue to rise due to policy. I would not personally do so at the current time .....but there is always an undervalued company in the sector if you are willing to work at it.

     

    D
    29 Mar 2014, 10:14 PM Reply Like
  • Econ Student
    , contributor
    Comments (228) | Send Message
     
    Oil companies are not in a bubble. That's probably the most undervalued sector around.
    30 Mar 2014, 04:11 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs