TSC Weekender: Biotechs Are Blinded With Science

THE PULSE Where TSC feels the market's beat. MORE THE TRADER'S TONGUE JJC translates Street-speak. MORE

Biotech's Bubble Bursts

There's nothing new under the sun, but that doesn't mean it won't affect stock prices. Tuesday's joint statement by President Clinton and U.K. Prime Minister Tony Blair about democratizing gene-sequencing data was hardly shocking. But biotech stocks still gasped, then practically fainted dead away, some plunging more than 25%. What started with genomics extended to the sector, and while many experts were pointing out the lack of "new" in the news, the stampede was on. The Nasdaq and Amex biotech indices each dropped 13%.

Even companies that would benefit from the access to the gene data, suffered, indicating just how "me too" the selloff was. Follow that Thursday with the Dow's 499.19-point rally based on similarly elusive factors and you had a market as capricious as child.

Friday wrapped up with the Nasdaq back in its usual form, cruising steadily upward and closing at 4582.68. So what else is new?

Kayte VanScoy, special to the TheStreet.com, contributed to this article.

"How is it that after the closing bell, the pricing of that day's QQQ continues to change, often over the next couple of hours?" Jeff Mandel asks. "If it trades at a fixed price during the day, wouldn't the closing bell set the closing price of the derivatives, too?" The answer is very simple. But the question, Jeff, is which closing bell and which QQQ? MORE Enter the Idiot Box, where all your pesky little questions will be treated with kind condescension. As your fifth-grade teacher used to say, everybody else wants to know the answer, too. Please do send your queries.

>To order reprints of this article, click here: Reprints