Drug stocks take a hit
Gilead shares drop nearly 10% on lowered sales guidance. But the strength of technology shares may be pulling money out of health care.
Updated at 4:55 p.m. ET
Not a good day for health care shares, especially those of Gilead Sciences (GILD).
Gilead makes a number of important drugs used to treat AIDS-related ailments, and its shares were down 9.6% to $40.76. Late Tuesday, it trimmed its guidance for full-year sales.
At the same time, Merck (MRK) was off 3.7% to $34.74 -- the biggest decline among stocks in the Dow Jones Industrial Average ($INDU).
Gilead didn't have a bad quarter. Earnings of 99 cents a share beat Street estimates by 3 cents. Revenue was up 36% to $2.08 billion; the consensus was $2.07 billion.
Sales of most of its drugs beat estimates -- except one.
Sales of Atripla, used to treat HIV infection, increased 36% to $692.9 million for the first quarter of 2010, up from $509.9 million in the first quarter of 2009. However, analysts were looking for sales of $726 million.
But another issue is that companies are still taking charges related to the taxation of retirement health benefits under the new heath reform bill. Abbott Laboratories (ABT) included that in explaining why it expects charges totaling 34 cents a share to hit earnings this year. Abbott was down 2.4% to $51.78.
Another is Venezuela's January devaluation of its currency, the bolivar.
But there is also a sense, at least according to Art Hogan, the chief market analyst at Jeffries, that technology shares are sucking money from other parts of the market.
The catalyst: "Strong earnings from the sector, including Apple (AAPL)," he told Reuters.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices extended this week's losses with a broad-based retreat. The S&P 500 fell 0.6% to end the week lower by 1.1%, while the Russell 2000 (-1.1%) finished with a 0.9% decline since last Friday.
Staying true to the theme observed throughout the week, the energy sector (-1.5%) tumbled out of the gate, thus dragging the broader market down with it. Once again, dollar strength and crude oil weakness contributed to sector's underperformance, but the ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'