I noticed that in the first hours of NYSE trading on October 6, 2020, stock prices for most biotech companies went down.

Examples include: ABBV, BIIB, BMRN, BMY, BSGM, GILD, GSK, LLY, NBIX, PFE, et al.

This is in contrast with the behavior of the rest of the NYSE market.

Looking at news reports, I was not able to find a reason why biotech, as a class, would suddenly lose some valuation.

Does anyone know why it went down (and can explain how you figured it out)?

  • 2
    Downvoting. You talk about Biotech and then list various stocks - which are NOT BIOTECH. Bascically you ask why a number of stocks dropped, which is non sensical because your selection seems to be - stocks that dropped. – TomTom Oct 6 at 19:16
  • Questions asking why some specific stocks dropped (or went up) are off-topic. – Chris W. Rea Oct 6 at 23:06
  • @ChrisW.Rea Is that rule documented anywhere? I’ve never heard that rule before or seen it discussed on meta. – Ben Miller - Remember Monica Oct 7 at 20:11
  • @BenMiller-RememberMonica Yes, at money.stackexchange.com/help/on-topic. Search for "evaluation of conditions" and "why did X go up". – Chris W. Rea Oct 7 at 23:20

You've lumped stocks of different sectors under biotech. The companies you listed are biotech, manufacturers, medical equipment, drug manufacturers. They're rather different.

I don't know why this correction occurred this morning but in the absence of major news, there can be a variety of reasons why one group of stocks does not track the market:

  • Profit taking after a run up

  • Sector rotation (cashing out of one sector in order to go into a more desirable one, or rotation within a sector)

  • Large/small cap outperformance (IWM up more this morning than SPY)

  • Minor news observed by institutions. For example, a politician suggests some regulation on a sector and those stocks react (sellers)

My bet is that this is just a function of the stocks that you watch are down and most are not biotech - the XBI is up today.

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