Although participation in the rally was light, both the Dow Jones Industrial Average and the S&P 500 tiptoed to record highs on Tuesday, fueled by news that the U.S. GDP grew at a 5% clip in the third quarter.It wasn’t a banner day for every stock, however.
Agios Pharmaceuticals Inc (AGIO), Zulily Inc (ZU) and Aruba Networks, Inc. (ARUN) were all underwater for today’s trading session.
Here’s what investors need to know about each stumble.
Agios Pharmaceuticals Inc (AGIO)
To say today was a tough day for biotech stocks would be an understatement. It was a horrible day for biotech stocks, with the NASDAQ Biotechnology Index falling 4.6%.
The most plausible explanation for the selloff is a combination of year-end profit-taking and the ripple effect of yesterday’s bad news regarding Gilead Sciences, Inc. (GILD) hepatitis C drug Sovaldi.
Regardless of the reason for the groupwide implosion, Agios Pharmaceuticals led the charge. AGIO stock fell more than 11% today, unwinding some of its 175% gain since September, and underscoring the industry-wide profit-taking theory.
Zulily Inc (ZU)
Thanks to the nearly 8% plunge from ZU stock today, Zulily shares are now trading at their lowest prices since the November-2013 initial public offering. Zulily is currently at a price of $23.25 and threatening to move below the IPO price of $22.
The prompt for Tuesday’s plunge was a cautious outlook from ITG Research regarding Zulily’s customer activations, which according to the report slowed in the fourth quarter.
It’s not a difficult premise to accept given ZU stock’s disappointing Q4 guidance released in early November. Zulily projected sales of somewhere between $391.3 million and $416.3 million for the current quarter, versus analyst expectations of $412 million. Zulily even acknowledged a customer activation hurdle at the time the fourth quarter guidance was offered.
Aruba Networks (ARUN)
Networking hardware company Aruba Networks saw its shares plunge today, though on no specific, company-related news. All told, ARUN stock fell more than 6% on Tuesday, moving to new multi-week lows in the process.
Though neither a new development nor a significant development, traders have been a bit obsesses by the fact that Dominic Orr — technically an “Aruba Networks” insider — recently sold 5000 shares of MannKind Corporation (MNKD) stock, totaling about $95,000 worth of shares. It was only a drop in the bucket of his 175,000 shares worth $3.3 million, yet investors have largely interpreted it as a reason for worry.
That worry over the upside of ARUN stock may be misguided, however. IT consulting firm Gartner has, for the second year in a row, deemed Aruba Networks as one of the top-tier players in the network access control arena.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.