You know when the highlights come on during football season, and you see a wide receiver leaping high into the air to snag an overthrown ball, and the defensive back comes in and knocks out his legs?
That's what happened to biotech today. And in the end, that's what happened to the rest of the market, particularly the recent leaders -- technology, telecoms and biotech.
Biotech stocks got crushed after
President Bill Clinton
and British Prime Minister
issued a joint statement stating that "raw fundamental data on the human genome, including the human DNA sequence and its variations, should be made freely available to scientists everywhere." That call to make the info "freely available" raised questions in the minds of traders and investors of the profit potential of companies involved in biotech.
American Stock Exchange Biotechnology Index
swooned 13.2%, while the
Nasdaq Biotechnology Index
The biggest losers on the
Nasdaq Stock Market
in value terms were biotech stocks. For example:
Protein Design Labs
fell 61 7/8 to 195;
swooned 59 1/2 to 176 and
crumbled 53 1/2 to 143 1/2.
While stocks fell sharply across the board, the Treasury market rallied as investors and traders fled to the safety of Treasury securities.
Meanwhile among major market averages, the
Nasdaq Composite Index
led the way percentage-wise on the downside, tumbling 200.61, or 4.1%, to 4706.63. It was the second-worst point decline ever for the Comp. Steep losses in index heavyweights
-- to name a few -- helped hammer the Comp.
The Comp traded as low as 4706.61 and as high as 5013.49 intraday.
"The selloff is feeding on itself," said Peter Coolidge, managing director of equity trading at
Brean Murray Foster Securities
, late in the session. The trader said he couldn't pinpoint a specific catalyst for the downswing, however. Going forward, the market's "liable to swings on both sides," up and down.
Dow Jones Industrial Average
gave up 135.89, or 1.4%, to 9811.24.
were the biggest drags on the Dow. Alcoa swooned 10% after it said it is acquiring
. Cordant, conversely, soared 86.3%.
H-P slumped 6 1/2, or 4.4%, to 140.
surrendered 24.47, or 1.8%, to 1359.15. The
slumped 17.15, or 2.9%, to 572.99.
TheStreet.com Internet Sector
index dropped 19.54, or 1.5%, to 1273.43. The biggest loser in the DOT was
Check Point Software Technologies
, which tumbled 21 5/16, or 8%, to 246 7/8.
TheStreet.com New Tech 30
crumbled 71.35, or 8.3%, to 789.44. The TSC New Tech 30, unveiled Jan. 5, is a market-cap-weighted index focused on tracking the most scorching part of the market, the magnet for Wall Street's hot money. A list of the index components is available at
Instead of being a magnet, traders and investors were repulsed by issues in the New Tech 30 today. The biggest loser in the gauge was
, which fell 31 1/16, or 13.6%, to 197 1/16.
Looking at the way things wound up on Wall Street, it's tough to believe that the market actually started on a pretty good note. The Comp, for example, hopped to the 5013 level early on.
Major stock proxies logged their intraday highs early in the day, despite some less-than-bullish news on the economic front, which showed U.S. consumers didn't cool off their spending habits last month. The government said
rose 1.1% in February, a little above what economists polled by
were predicting. Sales excluding autos, were well above consensus estimates. Ex-autos, retail sales rose 1% versus the expected 0.6% economists were looking for, according to the
The good mood in the market didn't last long as the sellers emerged. After hopping so much in the morning, the Comp had migrated to the red this afternoon and didn't see green the rest of the day.
Arguably the biggest story in the market today was the swoon in biotechs, which have been on an awful losing streak for a little more than a week. The Nasdaq biotech index's last positive closing session was March 6, when it closed at 1596.53. Since then it's been flat-out heinous. With today's close of 1143, the index is about 28% off its March 6 all-time closing high.
John Hughes, technical analyst at
, said the biotech sector is a good proxy for the level of speculation in the market. The technician pointed out that, for a while, money going into the market has been flowing to the telecom, tech and the biotech sectors. He said, however, that, eventually, that's going to end and they're "going to get all the money they're going to get." And he said he thinks the market's getting closer to that point.
Hughes said his shop's been advising clients and colleagues to protect themselves -- with defined stop levels, for example -- in stocks that have had huge run-ups, like biotechs.
Another sign of the level of speculation in the market is the level of margin debt, Hughes noted.
The latest margin numbers reflect that point well. The
New York Stock Exchange
said member firms' margin debt through February stood at $265.21 million, an 8.9% jump from the end of January total of $243.49 million.
In the fixed-income world, Treasuries rallied sharply thanks to the swoon in stocks. The 10-year note was up 18/32 to 101 16/32, yielding 6.30%. The 30-year Treasury bond was up 31/32 to 102 2/32, putting its yield at 6.10%. (For more on the fixed-income market, see today's Bond
In NYSE trading, 1.091 billion shares were exchanged while declining stocks beat advancers 1,697 to 1,283. In Nasdaq action, 1.959 billion shares traded while losers defeated winners 2,780 to 1,503. New 52-week lows beat new highs 134 to 34 on the NYSE while new highs beat new lows 163 to 116 in over-the-counter trading.
Among other indices, the
Dow Jones Utility Average
said goodbye to 2.45, or 0.9%, to 274.12; the
Dow Jones Transportation Average
slipped 10.17, or 0.4%, to 2381.77; while the
American Stock Exchange Composite Index
fell 3.35, or 0.3%, to 1015.51.
B2B is going to China.
announced that it will partner with Hong Kong's biggest telephone company, Cable & Wireless HKT to create a purchasing exchange and portal for businesses there.
is getting in on the act as well. A spokesman for the business-to-business e-commerce investment company says it will unveil its own partnership for a trade exchange in China at 11:30 PST tonight.
Commerce One was thin with details before the announcement tonight, but a spokesman noted it will have multiple participants, and said as much as 20% of Chinas gross domestic product could be traded through the exchange.
Commerce One's move will be just the latest in the rush of B2B to China.
Internet Capital Group
disclosed last week terms of its plans to buy Hong Kong toymaker Harbour Ring International Holdings with Hutchison Whampoa and Li Ka-Shing Foundation. The companies plan to rename Harbour ICG AsiaWorks and spin it into a B2B direction.
For coverage of today's top stocks in the news, see the Company Report, published separately