Biotechnology stocks took a beating on Tuesday, along with therest of the stock market. Declines in the sector werewidespread, with top-tier and second- and third-tier stocksfalling.
The AMEX Biotechnology Stock Index fell 3.7 percent to 159.42,a loss of 6.12 points. The Dow Jones Industrials fell 61.94points to 3213.55, a 1.9 percent decline.
Among the hardest hit were Synergen Inc. (NASDAQ:SYGN),losing $4.25 to $39.25; Deprenyl USA (NASDAQ:DUSAU), whoseunits dropped $4 to $23; and Immune Response Corp.(NASDAQ:IMNR), which fell $3.25 to $20.75.
Richard Hoffman, managing director and chief investmentstrategist at Cowen & Co., attributed the overall market declineto several factors, including seasonal portfolio juggling, theimpact of recent interest rate increases on 1993 earnings andthe fall in the Japanese stock market.
"The Japanese market has fallen below 18,000, down 50percent from its high, and there are fears that the Japanese willbe forced to liquidate their U.S. securities," Hoffman said. Whilehe doesn't foresee a wholesale sell-off, some liquidation isdefinitely a possibility, he said.
"The biotech sector has the most pure emotion to it because ithas, on average, no earnings," said Hoffman. "Anytime you get areaction like this, a sector being valued on hope will react."
Nevertheless, said Hoffman, a bull market still exists and therecent decline presents the next big buying opportunity. Hepredicted the Dow could fall another 100 points, but then heexpects it to rise for the rest of the year. -- Karen Bernstein
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