Fears of a trade war with China drove stocks lower today. The Dow Jones Industrial Average (DJINDICES:^DJI) was down more than 400 points at one point but recovered a bit, and the S&P 500 (SNPINDEX:^GSPC) fell as well.
Today's stock market
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Industrial stocks suffered the biggest losses, with the Industrial Select SPDR ETF (NYSEMKT:XLI) dropping 2.1%. Biotech shares had a good day, though; the iShares NASDAQ Biotechnology ETF (NASDAQ:IBB) rose 1.5%.
Boeing loses altitude on trade fears
Shares of Boeing fell 3.8% thanks to worries of an escalating trade war with China. Over the weekend, China announced additional tariffs on 659 U.S. products representing $50 billion of U.S. exports in retaliation for tariffs on Chinese goods that the Trump administration announced last week. The new duties of 25% will be imposed on 545 items amounting to $34 billion on July 6, and will include agricultural products, seafood, and vehicles. The tariffs on the remaining 114 items worth $16 billion in trade will be imposed at an unannounced later date, and will target chemical products, medical equipment, and energy products.
Boeing investors may have felt some initial relief that aircraft were not on the list for the new tariffs, but President Trump stirred up concern about further retaliation when he asked administration officials to identify a new list of $200 billion in Chinese goods that could be hit in the next round of what appears to be an escalating trade war. Since China only imported about $130 million in goods from the U.S. in 2017, any American product could be a target in a Chinese response, and China represented almost 13% of Boeing's revenue last year.
In an earlier round of tariffs announced in April, China put a levy on commercial aircraft that appeared to avoid hitting the bulk of Boeing's exports to that country by targeting smaller aircraft, and the markets shrugged it off. This week, though, investors are starting to worry that the escalating war of words may lead to significant damage to the company's business.
Sarepta Therapeutics jumps on gene therapy success
Sarepta Therapeutics, a commercial-stage biotech company specializing in precision genetic medicines for rare neuromuscular diseases, announced surprisingly strong results from a trial of a gene therapy for Duchenne muscular dystrophy (DMD), and the stock skyrocketed 36.8%.
At the company's R&D Day, Dr. Jerry Mendell of Nationwide Children's Hospital presented results from the first three children in a early phase trial that demonstrated that a gene therapy approach could have dramatic effect on children with DMD. All patients showed significant decreases, averaging 87%, in levels of serum creatine kinase (CK), an enzyme associated with muscle damage that is present in high levels in people with the disease. Levels of dystrophin, a protein that supports muscle fiber strength, were increased.
"I have been waiting my entire 49-year career to find a therapy that dramatically reduces CK levels and creates significant levels of dystrophin," said Dr. Mendell in the press release. "Although the data are early and preliminary, these results, if they persist and are confirmed in additional patients, will represent an unprecedented advancement in the treatment of DMD."
Results from the study, which will eventually expand to 12 patients and was conducted through a partnership with the hospital under an exclusive license agreement, helped verify Sarepta's gene therapy approach to DMD. Sarepta's been on a roll recently, with one DMD drug launched and another drug in the works that had positive trial results last year. The company expects to submit the latter to the FDA for approval by the end of the year.