Newspaper article THE JOURNAL RECORD

NASDAQ Experiences Second-Worst Point Drop Ever

Newspaper article THE JOURNAL RECORD

NASDAQ Experiences Second-Worst Point Drop Ever

Article excerpt

NEW YORK (AP) -- The Nasdaq Composite index sustained its second- worst point drop in history Tuesday, as some bad news for biotechnology companies gave investors a reason to pull their money out of a broad range of stocks. The Dow Jones industrials followed the Nasdaq, giving up early gains and also closing sharply lower.

The Nasdaq fell 200.61, or 4.1 percent, to close at 4,706.63. With Monday's 141-point loss, the Nasdaq has shed 6.8 percent in two sessions; Tuesday's drop was second only to a 229.46-point slide on Jan. 4. The Dow fell 135.89 to close at 9,811.24. Selling pressure accelerated in the final half-hour of trading.

Broader market measures also surrendered early gains to finish lower. The Standard & Poor's 500 fell 24.47 to 1,359.15 and the Russell 2000 index of smaller companies plunged 17.15 to 572.99.

Biotech stocks plunged, pulling the rest of the Nasdaq, after the United States and Britain agreed to openly share data from a project to decode the human genetic pattern. The agreement halts several companies' plans to sell genetic data to drugmakers and researchers.

Incyte Pharmaceuticals skidded 53.5 to 143.5 and Human Genome Sciences fell 29.046875. PE Corp.'s Celera Genomics tumbled 47 to 142 on the NYSE.

Analysts said that while some companies will struggle to find other sources of revenue, most biotechnology business are involved in a wide range of projects and won't be adversely affected by the decision.

"This is a bit of an overreaction," said Dr. Joseph Zammit- Lucia, president of Cambridge Pharma Consultancy. "It's a little bit of correction in a frothy market."

Biotech stocks have been among the strongest performers in the Nasdaq's sharp rise this year, leaving them especially vulnerable to profit-taking, analysts said.

"When you get something that's gone up to that extent, you're going to get violent shakeouts," said Don Selkin, chief investment strategist at Joseph Gunnar in New York. …

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