Wall Street traders were awakened by a ferociously hungry bear to begin the first full trading week of 2015, as U.S. light crude oil collapsed in the morning below $50 per barrel and brent crude fell below $53. These were the lowest levels seen in the energy markets since 2009.
The Dow Jones Industrial Average was down as much as 350 points by mid-afternoon and limped to the finish line almost 2% lower. The S&P 500 was also hammered and finished just slightly better, down 1.8%, while the Nasdaq Composite gave back nearly 1.6%.
Even a strong December domestic sales report from the U.S. automakers, and in particular, General Motors Company (GM), whose sales report beat analysts’ estimates by 6%, failed to lift stocks.
There were very few complete sectors in the green today, but despite the trouncing, several medical stocks did manage to buck the trend and perform well, such as Boston Scientific Corporation (BSX) and ISIS Pharmeceuticals, Inc. (ISIS). Financial stock RCS Capital Corp (RCAP) also performed well on the day.
Boston Scientific Corporation (BSX)
BSX was one of a handful of medical stocks which defied the market downturn, finishing up more than 4%. JP Morgan Chase & Co. upgraded the medical device company from neutral to overweight, with better expectations seen for the company throughout the remainder of this year and into 2016. Intraday, BSX stock broke through some recent resistance at $13.75, before closing out the day at $13.81.
ISIS Pharmaceuticals, Inc. (ISIS)
ISIS blistered up more than 10% on almost 10 million shares after entering into a global collaboration with Johnson & Johnson’s (JNJ) subsidiary Janssen Biotech, Inc. to research and develop “antisense” drugs to treat autoimmune diseases within the gastrointestinal tract. Antisense drugs work by inactivating RNA in the cells and targeting disease cells that previously have not responded to other forms of medications.
The agreement states that JNJ will pay ISIS up to $835 million to allow Janssen the option to license three of these drugs for autoimmune disorders of the bowel. The good news allowed ISIS stock to break out to a new closing high of more than $68.
RCS Capital Corporation (RCAP)
RCAP stockfinished up more than 5% following disclosure that two of its subsidiaries, Realty Capital Securities, LLC, and The Hatteras Funds, raised $9.7 billion for RCAP in 2014, with $270 million alone coming in the month of December. This amount exceeded the Street’s expectations.
RCAP is an consulting service that advises sponsors in structuring and the development of new direct investment programs, funds, and other financial products. The Hatteras funds offer unique alternative investment solutions for financial advisors and clients.
RCAP stock, which recently had fallen from $25 to $9 after the firm had been investigated for breaches of fiduciary duty, has now rebounded to near $13 per share.
As of this writing, Ethan Roberts held no positions in any of the aforementioned securities.
