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Bulls Make New Record High Despite Biotech Blues


Today's financial recap and tomorrow's financial outlook.

The biotech sector was in focus today on a new industry pricing scare.

Express Scripts (ESRX) named AbbVie's (ABBV) Viekira Pak as its exclusive treatment for the most common form of Hepatitis C. AbbVie (ABBV) competitor Gilead (GILD), which makes more expensive competing drugs, fell 14.3% to $92.90 in reaction to the news.

This spurred concerns over additional challenges to the high prices charged by biotechnology companies, and the iShares Nasdaq Biotechnology ETF (IBB) fell 2.6% to $309.08. As of Friday's close, IBB was up 39.7% year-to-date and thus overheated, so momentum traders were quick to lock in profits.

The SPDR S&P Biotech ETF (XBI), which has a much smaller weighting in Gilead, fell 0.8%.

The action today was mixed overall.

Oil and gold were weak as the US dollar rallied, and related stock sectors were fairly weak.

Gold miners were under notable pressure and traded down towards last week's lows.

On the positive side, there was some positive momentum in economically sensitive sectors like retail, airlines, and real estate. These sectors all outperformed the S&P 500, which rose 0.4% to finish at an all-time closing high of 2078.54.

Intraday, the index reached as high as 2078.76, less than one point away from the 2079.47 all-time high.

However, the Dow Jones Industrial Average was the real star today with an 0.9% gain as major components like IBM (IBM), Boeing (BA), and Home Depot (HD) rallied.

In economics news, November Existing Home sales came in at 4.93 million vs. the 5.2 million expected. Housing stocks initially fell on the news but recovered their losses into the close. The November Chicago Fed National Activity Index was +0.73, beating the +0.25 consensus.

Tomorrow's Financial Outlook

Tuesday will be quite a busy day in terms of economic data. We'll see November Durable Goods and Q3 GDP at 8:30 a.m. ET, followed by December University of Michigan Consumer Sentiment at 9:55 a.m. Then, at 10:00 a.m., November Personal Income and Spending, PCE Prices, and New Home Sales will be released.

This is a lot of market-moving data in span of 90 minutes. Given low trading volumes because of the Christmas holiday this week, it could be a volatile morning.

Crude oil prices will also continue to drive energy stocks and by extension, the high-yield bond market.

Twitter: @Minyanville

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