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San Diego biotechs bathe in stock market blood
Wall Street has lost $10 trillion since June 3
United States stocks plunged between 3.5 percent and 4 percent today (August 24), continuing a selloff that began in early June. Stocks are dropping all around the world; the slaughter has knocked off $10 trillion in value since June 3.
All eyes are on China, where stocks have lost 40 percent of their value since their June peak. The Chinese government is frantically trying to pump up stocks; on Sunday the nation for the first time permitted pension funds to invest in stocks.
The bull market in United States stocks began in March of 2009, with short-term interest rates effectively at zero. Stocks have moved up about 200 percent since then, despite weak growth of the economy. The Federal Reserve has been saying for some time that it would raise rates, despite those weakening world economies. Such a move would strengthen the dollar, which some consider too high against other currencies. However, the dollar slipped today. There is talk the Fed, concerned about the weak world stock markets, will not raise rates anytime soon.
Biotechs, which had been hot prior to the big slump, have been hit hard. In San Diego, ISIS Pharmaceuticals dropped 5.38 percent on the day. It is down 43.2 percent from its 52-week high. Ligand Pharmaceuticals dropped only 1.68 percent, but it is down 26 percent from its 52-week high. Illumina, which has enjoyed steady gains for a long period, dropped 4.06 percent and is now down 20.8 percent from its 52-week peak.
Two stocks focusing on obesity, watched carefully by Wall Street, have been beaten up badly. Arena Pharmaceuticals was down 8.59 percent today and is 56.8 percent off its high. Orexigen Therapeutics dropped 9.48 percent today and is down 70 percent from its 52-week peak.
WD-40, a consumer staple that enjoys a steady market for its products, has not been hit that hard. It was down 4.47 percent today and is only down 10.2 percent from its 52-week high. Callaway Golf, which is more cyclical, was down 5.14 percent today and is down 18.5 percent from its 52-week high.