Dow Drops 400 After Starting the Week at Record Highs


The Dow was down this week after a record-setting start. It fell 276 points over 5 days, and closed the week at 17,856.78. The NASDAQ and S&P 500 both lost ground as well, with the NASDAQ falling -26 points and the S&P 500 down by -33. The NASDAQ closed the week at 4,927.37 and the S&P 500 ended at 2,071.26. In overseas markets, the big story this week was the falling Hang Seng, which lost over -400 points.

Buffett Publishes Berkshire's Yearly Letter. Warren Buffett released Berkshire-Hathaway's letter to shareholders earlier this week, and by all accounts it has been a good year for the company.

This year marks the 50th that Buffett has written the letter, and he used it as a chance to defend the structure of Berkshire. Buffett noted that, even though holding companies consolidate vastly different companies into one corporation, the benefits when it comes to moving capital and remaining profitable in a mixed marketplace are worth the management challenges.

The media was quick to pick up the story and offer their own interpretation of Buffett's successes. Berkshire's letter has gotten the attention of more than just the cable news talking heads, though. CEO Thomas Murcko, a longtime student of Buffett's, made a lot of the same points in a recent article on his website. Murcko stressed the importance of being able to tell the difference between a strong business and one that is enjoying success, and mentioned that it's important to 'be cheap' and look for values regardless of share price. The piece goes on to share a lot of other lessons that Buffett has taught Murcko over the years.

February Unemployment Falls To 5.5%, Stokes Fears Of A Rate Hike. Investors were worried on Friday that the Bureau of Labor's announcement of lower than expected unemployment numbers could cause the Fed to raise interest rates. Raising rates, which make it more expensive to borrow money, are expected in June, but high job growth could cause the Fed to act sooner. Although people are concerned, the chair of the Fed recently testified before Congress that rates will stay at the present levels until the summer, but that estimation was likely made using a preliminary copy of the jobs report.

5 Hot Mid-Cap Pharmaceutical Stocks to Watch. The market might have had a tough week, and the record highs didn't last, but the health services sector seems to be immune to losses right now. We found 5 fast-growing, mid-cap pharmaceutical stocks that did very well this week, and look poised to deliver big profits going forward.

OHR Pharmaceuticals (OHRP) grew 49% this week, starting at just under $9 per share and closing out Friday at $11.48. Atara Biotherapeutics (ATRA) shot up from $20 to over $30 on Wednesday, then settled back down to $28.31. Celladon Corp (CLDN) was up more than 30% over 5 days, ending at $24.00 per share. Both Kythera Biopharmaceuticals (KYTH) and Tracon Pharmaceuticals (TCON) rose by more than 25% this week, closing at $53.13 and $17.57 respectively.

10-Year Treasury Notes Up On The Week. While fears of the Fed raising interest rates have been hard on the market, an increase in rates is always good for bond prices. Over the past week yields for Treasury notes have risen, with 5-year yields at 1.70%, 10-year yields at 2.24%, and 30-year yields as high as 2.84%. An increase in the yield of Treasury notes is normal in an economy with a strong currency and rising interest rates, so look for the trend to continue.

Lumber Liquidators Is This Week's Big Loser. Discount lumber yard Lumber Liquidators (LL) lead the market in losses as a percentage of share price this week, falling 35.75% over 5 days. Lumber Liquidators is having legal troubles after being hit with a $5 million class action lawsuit by its customers. The company is accused of knowingly mislabeling and selling toxic flooring.

Published on Mar 6, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2016. Content published with author's permission.

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