June 17, 2009
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RELATED TICKERS: MIPIQ.PK.DL
From looking at which sectors are falling and which are rising you can see money managers are shifting money back into the drug sector.
Investors Surging into Defensive Healthcare Stocks
President Obama's plans to cut healthcare costs have made some investors in the sector nervous, but across the board on Wednesday healthcare stocks were showing relative strength as investors sought out defensive names amid broader market weakness.
Stocks in the Big Pharmaceutical Stocks Index were putting up consistent gains. The Index is ahead by 1.6%. It is now ahead of the S&P 500 by 1% over the last month.
Blue chips like Johnson & Johnson (NYSE: JNJ - News), Pfizer (NYSE: PFE - News), Merck (NYSE: MRK - News), Bristol Myers Squibb (NYSE: BMY - News), and Abbott Laboratories (NYSE: ABT - News) were all up by 1% or more in early trading.
Stocks in the Biotechnology Stocks Index are also seeing action to the upside. The Index is ahead by 0.4%. It is now ahead of the S&P 500 by 9.2% over the last month.
Share of Molecular Insight Pharmaceuticals (NASDAQ: MIPI - News) are up more than 35% after the company presented positive data on a prostate cancer drug. Savient Pharmaceuticals (NASDAQ: SVNT - News) is up more than 30% after the company received a positive recommendation for its gout drug from the FDA.
Elsewhere in biotechs, Antigenics (NASDAQ: AGEN - News) is up more than 7% on news that GlaxoSmithKline (NYSE: GSK - News) has proceeded with late-stage clinical trials of a malaria vaccine that uses an ingredient developed by Antigenics. Genzyme (NASDAQ: GENZ - News), meanwhile, is rebounding after analysts at Oppenheimer and Jefferies maintained their outlook on the stock, despite news that the company will have to halt production on of its plants due to a virus.
Elsewhere in the sector, the Specialized Healthcare and Outpatient Services Stocks Index is up today by 1.9%. It is ahead of the S&P 500 by 4.6% over the last month.
Analysts at Bank of America relaunched coverage of several names in the sector. Dialysis services DaVita (NYSE: DVA - News) was initiated with a "buy" rating and a price target of $57. Inpatient behavioral healthcare services provider Psychiatric Solutions (NASDAQ: PSYS - News) also garnered a "buy" rating and a price target of $25. The stocks are up 3% and 1% respectively on the day. Leading the Index higher is U.S. Physical Therapy (NASDAQ: USPH - News) with a 5% gain.
As of this writing, though the market is showing broad weakness, 20 of 32 healthcare Indexes are trading in positive territory.
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I see that too.