A stunningly strong job-growth number for June sent the bulls into a frenzy today. The buyers didn’t stop until the S&P 500 was at 2129.9, up 1.53% for the day, and back into the black for the week. That close was the highest since May of last year.
Not every name was part of the rally, however. Baidu Inc (ADR) (NASDAQ:BIDU), Humana Inc (NYSE:HUM) and Juno Therapeutics Inc (NASDAQ:JUNO) each ended the day in the red, but for understandable reasons.
Baidu Inc (ADR) (BIDU)
A handful of Chinese internet stocks like Alibaba Group Holding Ltd (NYSE:BABA) and NetEase Inc (ADR) (NASDAQ:NTES) fell today — despite the broad market’s big gains — on the heels of new internet regulations in China. The name that’s most vulnerable to the new rules, however, fell the most. That’s Baidu. BIDU shares fell more than 2%.
Investors’ concern is the new rules from the State Administration for Industry and Commerce, which will put the onus on companies to vet advertisements for goods like medical treatments and tobacco products more carefully. The new standards will also add 3% in taxes for a swath of Baidu’s pay-for-performance business.
The state’s new standards are the result of the death of a young man who was misled by inaccurate advertisements he ran across using the Baidu search engine in his hunt for treatment options of his synovial sarcoma.
Humana Inc (HUM)
For the second day in a row, and for the same reason, Humana has earned a spot on the “Worst 3” list as HUM shares lost nearly 3% of their value.
The core headwind remains the increasingly low likelihood the insurer will be allowed to merge with peer and rival Aetna Inc (NYSE:AET). Yesterday, official word about the Department of Justice’s “significant concerns” up-ended HUM to the tune of 10%. Today’s setback came at the hand of JPMorgan analyst Gary Taylor, who downgraded Humana, saying, “We have long held that only HUM shares have material downside if the DOJ were to block the pending acquisition by Aetna.”
JPMorgan lowered its opinion on HUM from “overweight” to “neutral,” simultaneously lowering its price target on Humana shares from $196 to $150.
Juno Therapeutics Inc (JUNO)
Last but not least, biotech outfit Juno Therapeutics was easily Friday’s biggest loser among all listed stocks, with JUNO shares losing 32% of their value after the FDA halted a drug trial following the death of two of its participants.
The trial in question was of JCAR015 — the company’s CAR-T therapy for acute myeloid leukemia — though the drug itself may not have been the root cause of what became fatal brain swelling. Rather, a pre-treatment regimen of chemotherapy that includes chemo drug fludarabine may have been the culprit when used in front of JCAR015.
The hold on the trial doesn’t inherently mean the drug can’t be approved. Juno Therapeutics has already proposed stopping the use of fludarabine as a pre-treatment primer. But, the timeframe for the drug’s approval process was pushed back at least one year.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
