Stocks fell Monday on investors’ anxiety over the threat of inflation, declines in biotechnology shares and a downgrade of General Motors Corp. stock.
The Dow Jones Industrial Average fell 75.37, or 0.7 percent, to 10,766.23. The S & P; 500 was down 7.77, or 0.6 percent, at 1,203.60. The Nasdaq Composite Index lost 13.68, or 0.7 percent, to 2,051.72.
New worries about inflation arose after the Commerce Department’s latest reading on consumer income and spending. Personal income fell less than expected in January, but spending was flat and core consumer prices rose 0.3 percent the fastest rate in more than three years.
Pharmaceutical and biotechnology stocks were hit in early trading after Biogen Idec Inc. and Elan Corp. Plc announced they were voluntarily pulling their Tysabri multiple sclerosis drug from the market due to the death of a patient taking the drug. Biogen plunged $28.63, or 42.6 percent, to $38.65, while Elan plummeted $18.90, or 70.3 percent, to $8.02.
Analysts at Banc of America Securities downgraded General Motors and rival Ford Motor Co. to “sell” from “neutral,” saying both U.S. automakers would continue to lose market share to their European and Japanese rivals. GM dropped $1.24 to $35.67 and Ford lost 35 cents to $12.65.
Among local movers, shares of Jakks Pacific Inc. gained 1.9 percent to close at $19.77 after the Malibu-based toy marketer announced it had signed a licensing agreement with Sesame Workshop, the non-profit organization behind “Sesame Street,” to produce a videogame based on the Sesame Street characters. The games retail for approximately $20 each.
Health Sciences Group Inc. rose 5 percent after the L.A.-based nutritional products company announced it had acquired Open Cell Biotechnologies, Inc., a wholly-owned subsidiary of UTEK Corp., in a stock transaction. Open Cell Biotechnologies and Health Sciences Group will work on edible sponge technology, which may be used in the future as a carrier for vitamins, minerals and other food supplements.
On the down side, shares of Innovo Group Inc. lost 6.3 percent to close at $4.45 after the Commerce-based apparel and accessory firm reported quarterly earnings. Innovo Group reported fourth-quarter net income of $119,000 (4 cents per diluted share), compared with a loss of $5.8 million (23 cents) for the like period a year earlier. Revenues declined to $30.1 million from $33.6 million for the comparable year-ago period.
Ixia fell 6.3 percent to $18.01 after the Calabasas-based data communications company’s stock rating was downgraded to “peer perform” from “outperform” by research firm Thomas Weisel Partners.
