S&P 500 Undercuts Support, But Endo, Allergan Lead Drug Stocks Higher – Investor’s Business Daily

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Stocks turned lower in afternoon trading Friday despite a bigger-than-expected increase in retail sales.

The Dow Jones industrial average fell 1%, the S&P 500 0.8%, with both falling below their 50-day moving averages. Neither has closed below the 50-day line since Feb. 29. The Nasdaq, down 0.5%, has been below that key support level since May 2.

Volume in the stock market today was tracking lower than at the same time Thursday.

Drug stocks were among the biggest gainers while oil, retail and transport stocks fell.

Endo International (ENDP) rose 4% in heavy volume as it tries to stem a sharp decline that has seen the stock drop to its lowest level since 2003 amid a federal probe into its relationship with companies that manage prescription benefits.  Two other companies — Johnson & Johnson (JNJ) and Merck (MRK) — have been contacted as part of the investigation, according to Reuters.

Recently, Valeant Pharmaceuticals (VRX) was forced to end its ties to pharmacy benefits manager Philidor over its billing practices. Valeant is 90% off its 52-week high. Valeant rose 3% Friday intraday.

Allergan (AGN), which hasn’t been named in the investigation, rose more than 3% in afternoon trading. The Botox maker is part of the generic drugs industry group, which was the best performer Friday.

Department store retailers had another bad day despite a government report showing that retail sales rose more than expected in April.

Nordstrom (JWN) plunged 13% after Q1 profit dropped 45% to 36 cents a share, much worse than Wall Street had expected. Nordstrom also issued disappointing full-year guidance. JCPenney (JCP) was down nearly 4% after a mixed earnings report.

Brick-and-mortar retailers are suffering as shoppers increasingly buy online through sites such as Amazon.com (AMZN).

Gaming-related stocks were a bright spot Friday. Nvidia (NVDA), which makes graphics chips used in computers, game consoles and mobile devices, jumped more than 14% to a record high after a strong quarterly earnings report. Nvidia is now up 23% since breaking out of a cup-with-handle base March 16.