The bulls’ win streak was capped at six days. Today — Oct. 7 — stocks finally hit a technical wall, perhaps a little spooked by a firm 4% rally in oil prices. By the time the closing bell rang, the S&P 500 was at 1979.92, down 0.36%.
And some stocks found themselves much deeper in the red than that. Illumina, Inc. (NASDAQ:ILMN), EXACT Sciences Corporation (NASDAQ:EXAS) and Skyworks Solutions Inc (NASDAQ:SWKS) each dished out big double-digit losses in the shadow of alarming news.
Illumina, Inc. (ILMN)
As if biotech stocks weren’t facing enough of a headwind already, Illumina was hit particularly hard after the company warned investors that its third-quarter top line wasn’t as good as had been expected and then followed up by telling ILMN shareholders that Q4’s revenue total wouldn’t be all that great either.
Though sales should be up 14% on a year-over-year basis when Illumina reports its third-quarter numbers later this month, the company-projected top line of $550 million is short of the $569 million analysts had predicted. The fourth quarter’s expected top line of $570 million is also shy of the $603 million the market had been calling for.
The numbers were grim enough to prompt a couple of downgrades of ILMN. Mizuho lowered its opinion on Illumina from a “buy” to a “neutral”, while Stifel-Nicolaus lowered its price target on ILMN from $235 to $175.
ILMN closed 11% lower on Tuesday.
Skyworks Solutions Inc (SWKS)
Good news for PMC-Sierra Inc (NASDAQ:PMCS) shareholders was bad news for Skyworks Solutions investors on Tuesday, as the latter is buying the former in an outright cash deal worth $2 billion; the tender price of $10.50 per share of PMCS was 37% higher than where the stock closed yesterday.
Skyworks Solutions says it’s looking forward to adding PMC’s cloud storage and optical networking capabilities to its portfolio, but the intraday dip of 9% from SWKS and the daily loss of 1.4% say investors aren’t quite as confident the acquisition is worth the cost.
Not all analysts are thrilled either. Topeka Capital Markets lowered its target price for ILMN from $120 to $100 per share on the news.
EXACT Sciences Corporation (EXAS)
Last but certainly not least, EXACT Sciences got hammered today after the company’s colon cancer screening test, called Cologuard, didn’t make it onto the list of such tests recommended by the U.S. Preventive Services Task Force (or USPSTF). Rather, Cologuard was only listed as an alternate test.
The news inspired a stunning 46% setback for EXAS shares, as its absence on the list of suggested tests could potentially mean fewer insurers are willing to pay for the test.
Either way, EXACT Sciences’ management team plans to appeal the issue with the USPSTF, as it remains confident in the value of the test. And, it’s still possible the lackluster stance on the Cologuard test from EXAS won’t actually prove to be a drag in its utilization.
Clearly the market isn’t interested in taking that chance, however.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
