4:23 PM
Dec 04, 2018
 |  BC Extra  |  Financial News

Biotech falls as trade deal uncertainty sinks stocks

Biotech indexes fell along with the broader markets Tuesday after President Donald Trump appeared to walk back a Saturday statement that his administration would not increase tariffs on Chinese goods.

The NASDAQ Biotechnology Index (NBI) and NYSE Arca Biotechnology Index (BTK) each gained more than a percent on Monday following the announced halt in tariff increases, but closed down 4% on Tuesday after Trump tweeted that members of his administration would be "seeing whether or not a REAL deal with China is actually possible."

The Dow Jones Industrial Average, Standard & Poor’s 500 index and the NASDAQ Composite added between 1-2% on Monday, only to fall 3-4% on Tuesday.

In a statement Saturday, the White House said Trump would not increase to 25% an existing 10% tariff on $200 billion of Chinese goods. The administration also said Trump and President Xi Jinping will begin negotiations on "structural changes with respect to forced technology transfer" and IP protections.

The United States Trade Representative had determined in March that some Chinese actions related to technology transfers, IP and innovation were discriminatory or restrictive to U.S. commerce, and an updated report last month concluded that "China fundamentally has not altered its acts, policies, and practices related to technology transfer, intellectual property, and innovation, and indeed appears to have taken further unreasonable actions in recent months" (see "Chinese Foothold in U.S. Biotech is Growing, USTR Report Finds").

The SPDR S&P Biotech ETF (XBI) lost 1.5% over the two day period; the BioCentury 100 added less than half of a percent.

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