U.S. equities strengthened Wednesday with biotechnology stocks and sector-related exchange traded funds leading the charge on better-than-expected second quarter results.
On Wednesday, the iShares Nasdaq Biotechnology ETF (NasdaqGS: IBB), which tracks the Nasdaq Biotechnology Index,rose 2.5%. The SPDR S&P Biotech ETF (NYSEArca: XBI), which follows a more equal weight methodology, gained 3.2% and was testing its resistance at the 200-day simple moving average.
Additionally, the BioShares Biotechnology Clinical Trials Fund (NasdaqGM: BBC), which tracks potential up-and-coming biotechnology companies that are in the clinical trials stage, increased 3.2%. The ALPS Medical Breakthroughs ETF (NYSEArca: SBIO), which focuses on small- and mid-cap companies that have one or more drugs in either Phase II or Phase III U.S. FDA clinical trials, advanced 3.2%. The BioShares Biotechnology Products Fund (NasdaqGM: BBP), which follows U.S.-listed biotech companies with a primary product offering or product candidate that has landed FDA approval, increased 3.1%.
Fueling the rallying Wednesday, Abbot Laboratories (NYSE: ABT) announced better-than-expected quarterly sales and profit on strong sales in its medical device business, Reuters reports. ABT shares rose 2.6% Wednesday.
Progenics Pharmaceuticals (NasdaqGS: PGNX) surged 24.9% Wednesday after Valeant Pharmaceuticals International (NYSE: VRX) received approval to use Relistor, which was licensed from Progenics, tablets to treat op opioid-induced constipation for patients with noncancer pain, the Wall Street Journal reported.[related_stories]
Over two-thirds of the 20 largest pharmaceutical companies boosted revenues from major products in the first quarter by increasing prices, which should help the businesses’ bottom line, reports Charley Grant for the Wall Street Journal.
The Bureau of Labor Statistics’ Producer Price Index showed an almost 6% rise in prices for the year ended June 2016, or well above inflation rates. Moreover, the dearth in new breakthroughs has also contributed to the rise in prices as companies try to pad growth.
The S&P Global Market Intelligence projects health-care earnings per share to rise by 6.5% in 2016, ore higher than all but one market segment.
iShares Nasdaq Biotechnology ETF