Wall Street dips as momentum stocks drag; Nasdaq slumps
US stocks dipped on Friday and the Nasdaq fell sharply as weakness in momentum stocks weighed on indexes and erased earlier gains in the wake of the March payrolls report.
After appearing to stabilize earlier in the week, momentum stocks such as Biotechs fell for a second straight session. The Nasdaq biotech index lost 2.8 percent. Biogen Idec Inc fell 4.3 percent to USD 288.98.
'You've got some big names in there. There is a high correlation inside of those groups,' said Keith Bliss, senior vice-president at Cuttone & Co in New York. 'Managers tend to trade the entire group as opposed to individual names. So that of course, is hitting the Nasdaq and everybody else.'
Equities opened higher on optimism spurred by the nonfarm payrolls report, which showed jobs rose by 192,000 in March, just shy of the 200,000 forecast, after rising 197,000 in February. The unemployment rate was unchanged at 6.7 percent. With a solid pace of hiring for a second month, the economy appears to be recovering from a winter slowdown.
'Overall, people are taking this as a sign there isn't some sort of underlying weakness in the economy,' said Kate Warne, investment strategist at Edward Jones in St. Louis.
'It has fit into people's belief that most of the weakness we saw earlier was due to the weather and not something really changing about the economy.'
The Dow Jones industrial average fell 159.84 points or 0.96 percent, at 16,412.71. The S&P 500 lost 23.68 points or 1.25 percent, at 1,865.09. The Nasdaq Composite dropped 110.01 points or 2.6 percent, at 4,127.72.
The S&P earlier touched a record high of 1897.28, the third time this week that the index has set an intraday record.
Mylan Inc rose 4.8 percent to USD 52.24 after a report said the company was looking to acquire Swedish rival Meda AB . Mylan also sued Celgene Corp on Thursday to stop the latter's effort to keep generic versions of two drugs that generate USD 4.5 billion of annual sales off the market.
Boeing Inc is considering buying Mercury Systems Inc , a supplier of digital signal and image processing systems to the aerospace and defense industry, according to two people familiar with the matter. Mercury shares gained 3.9 percent to USD 13.75. Boeing inched up 0.1 percent at USD 128.91.
CarMax Inc, fell 2.8 percent to USD 46.25 after the largest retailer of used cars reported fourth-quarter results.
Halozyme Therapeutics Inc plunged 25.4 percent to USD 8.65 after the company said it was temporarily halting enrolment of patients and dosing of its cancer drug in a mid-stage trial on patients with pancreatic cancer, after the recommendation of an independent safety committee.
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