Stocks were mostly anemic on Thursday, looking for news to provide direction — and inspiration — on a slow news day. The stagnation was underscored by the fact that nobody wanted to do much of anything in front of Friday morning’s jobs report for October. The S&P 500‘s close of 2,099.93 was just 0.11% lower than Wednesday’s closing level.
It wasn’t an anemic session for all stocks though. Some stocks got hit especially hard, including QUALCOMM, Inc. (NASDAQ:QCOM), bluebird bio Inc. (NASDAQ:BLUE) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Here’s the deal.
Valeant Pharmaceuticals Intl Inc (VRX)
Will the misery ever end for Valeant Pharmaceuticals? Down more than 65% from its August peak as of Wednesday’s close, VRX tumbled another 14% on Thursday, reaching new 52-week lows (again).
All of the strong selling of late has stemmed from the Sept. 21 tweet posted by presidential hopefully Hillary Clinton, who took dead aim at overpriced specialty pharmaceuticals, hitting Valeant where it hurts the most. Today’s leg of the drubbing, however, was spurred by a new development on that front — a congressional investigation of the company was being initiated.
Though not being investigated like Valeant Pharmaceuticals, specialty pharma peer and rival Endo International plc (NASDAQ:ENDP) saw its stock lose 13% in sympathy with the pullback from VRX, as investors fear a witch hunt within the industry may be brewing.
QUALCOMM, Inc. (QCOM)
VRX wasn’t the only big loser to reach new 52-week lows on Thursday. QUALCOMM did the same despite topping its top- and bottom-line estimates for the previous quarter.
Last quarter, QUALCOMM earned an operating profit of 91 cents per share on revenue of $5.46 billion. Analysts were only calling for earnings of 86 cents per share of QCOM on sales of $5.21 billion.
The outlook for the current quarter — fiscal Q1 — was disappointing, however. The company now expects per-share profits to roll in between 80 cents and 90 cents on a top line of between $5.2 billion and $6 billion. That outlook puts a great deal of pressure on analyst estimates of 91 cents per share of QCOM and revenue of $5.63 billion.
Lost business with Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Ltd (OTCMKTS:SSNLF) was the crux of the reason revenues fell 18% last quarter, while the forward-looking headwind reflects a broader waning in its mobile chip and licensing business.
QCOM closed down 15%.
bluebird bio Inc (BLUE)
Last but not least, bluebird bio shares fell a jaw-dropping 22% on Thursday after its quarterly report also noted disappointing results from its trial of LentiGlobin BB305 as a treatment for a form of anemia stemming from a condition called beta-thalassemia. In simplest terms, the drug didn’t work as well as had been hoped for all slivers of the study’s patients.
Biotech expert Jason Napodano was quick to come to the company’s defense, suggesting the market was misinterpreting the data posted by BLUE. He noted:
“…the selling looks like an overreaction, as the data in non-B0/B0 patients looks fantastic and still like a cure… The B0/B0 patients are 1/3rd of the market and still doing better than before. The SCD data looks fantastic.”
Traders weren’t buying it though. In fact, they were selling BLUE, in spades.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
