After a whirlwind week of economic data, stocks are taking a chill pill on Friday, ending off the week on a low note. The Russell 2000, Nasdaq Composite, and S&P 500 are down 0.44%, 0.41%, and 0.16% respectively. The Dow is the only major U.S. index in the green for the moment, up 0.21%.
At face, those moves aren’t very dramatic. On Tuesday, U.S. equities jumped dramatically after the release of the Consumer Price Index (CPI) showed that inflation moderated in July, with the growth-centric Russell 2000 soaring nearly 3%. But by Thursday, things were all topsy-turvy, with the release of the Producer Price Index (PPI). Both elicited much more dramatic responses.
Still, below the top-line figures we see at the top of the market, there’s always stories in the stock market. Even today, a quiet Friday, there are stocks making big moves. In fact, many of today’s biggest movers come from the solar, biotech, and health insurance business.
But why? Let’s start with the reason why the Dow is up today:
UnitedHealth unites health insurers; lifts Dow
If you haven’t seen the year-to-date chart on health insurer UnitedHealth (UNH) , you’ve gotta see it. Back in April, the stock looked like it might be building towards an all-time high. Then, next thing you know, it was the worst performer in the Dow (and one of the worst in the S&P 500.)
Poor earnings results, a weaker outlook, and few hopes for a quick recovery have weighed on the stock. At one point, it had lost half of its value on the year. But today, it’s scoring a bid from a value-minded investors we all know and love: Berkshire Hathaway’s Warren Buffett.
As such, it’s up 14% today, almost single-handedly lifting the Dow. That’s not anecdote, either: UnitedHealth is contributing 236 of the Dow’s points as of this writing. If it weren’t part of the index, the Dow would be down 95 points today, per our very own Charley Blaine.
The confidence is also helping lift similarly-situated health insurers, who have been experiencing similar struggles in the face of government budget cuts and higher health care utilization. Centene (CNC) (+6%), Oscar Health (OSCR) (+5.8%), and Elevance Health (ELV) (+5.5%) are all following UnitedHealth onward and upward today.
Pharma stocks jump
Small-caps might be down, but pharma and biotech stocks are up today… again!
For the unacquainted, the SPDR S&P Biotech ETF (XBI) and the iShares Biotechnology ETF (IBB) are up 6.2% and 5.2% this week respectively (mind you, those are intraday figures.) That’s a kind premium on these battered-down stocks, especially when you compare it to the Russell’s 3% return over the same period.
So who’s leading the leaders today? Arrowhead Pharmaceuticals (+7%), Moderna (+7%), and Sarepta Therapeutics (+6.3%). Ironically, all firms that have faced their fair share of trial and tribulation recently.
Sarepta has faced FDA scrutiny over its gene therapy for Duchenne muscular dystrophy, forcing it to sell shares of Arrowhead, in which it was a sizable investor, to shore up its cash position.
And Moderna? Well, in case you didn’t know, this administration isn’t terribly enthused about mRNA vaccines for any number of reasons. Still, the company has an incredibly robust portfolio which might make the U.S. pay for, in every sense of the definition, turning their nose up at them.
Don’t get us wrong, there are some sinkers too, like Tonix Pharmaceuticals (-13.8%), which is atop the trending charts on investing social media platform Stocktwits this P.M., cooling down after the FDA approval of their new fibromyalgia drug. Even that’s good news, really!
Of course, if you zoom out, there have been fantastic returns out of bio land this year in general. This is just another Friday, really.
Not only are large pharma firms like Sanofi (SNY) and Merck (MRK) rolling up wads of cash and heading to M&A Station, but some smaller names like have been breaking out.
Let the largest holdings in the XBI speak for themselves: Alnylam (ALNY) (+91% year-to-date), Insmed (INSM) (+80%), Halozyme (HALO) (+39%). Impressive might be an understatement.
It’s not just sunny in health care land
There’s still money to be made outside of health care, though. Today, shares of solar stocks like Sunrun (RUN) (+32%), First Solar (FSLR) (+13%), Nextracker (NXT) (+12%), and Enphase Energy (ENPH) (+12%) are higher.
What’s charging up these solar names? Sunrun’s fantastic Q2 earnings, which dropped this morning. It revealed that the company’s profits more than doubled year-over-year, while revenues blew past expectations.
Sunrun’s big run comes just a few weeks after First Solar was first to sound off about the fast growth in the solar market. It raised its guidance across the board after a fantastic quarter, giving investors a ‘heads up’ that it wasn’t all so dreary in the clean energy sector, even if the Federal Government is indeed paling back tax credits and incentives for these sorts of energy investments (it plans to direct that money to expendable energy sources like natural gas, oil, and coal.)
The Invesco Solar ETF (TAN) is up 10.2% intraday; the iShares Global Clean Energy ETF (ICLN) is up nearly 4%.
This story is part of Stock Market Today, our daily live blog where we cover all things markets. To see Aug. 15’s issue, click here.
