* Nasdaq posts biggest daily percentage loss since Nov. 9,
* Biotech index has worst day since August 2011
* VIX, Wall Street's fear index, jumps 15 percent
* Dow down 1.6 pct; S&P 500 off 2.1 pct; Nasdaq off 3.1 pct
(Updates to close)
By Caroline Valetkevitch
NEW YORK, April 10 The Nasdaq suffered its
biggest drop in two-and-a-half years on Thursday after another
sharp selloff in biotech and momentum names, including Gilead
Sciences and TripAdvisor, increasing investor
anxiety about a broader pullback.
The Nasdaq biotechnology index shed 5.6 percent, its
biggest one-day drop since August 2011, adding to recent losses
since a big drop in Gilead more than two weeks ago triggered a
wider selloff for biotechs and other recent big gainers. The
Nasdaq biotech index has fallen 19.3 percent from its all-time
high of 2,872.29 on Feb. 25.
The S&P 500 also posted its biggest percentage loss since
Feb. 3, while the Nasdaq has dropped 7 percent from its closing
high for the year, set on March 5. All stocks in the Nasdaq 100
index posted a loss, with the exception of CH Robinson
Worldwide, which ended up 1.6 percent at $53.80.
The selling also hit the shares of three companies in their
first day of public trading after their initial public offerings
were priced on Wednesday night. All three IPOs ended lower.
"This is a pretty dramatic selloff, but it's not entirely
unexpected," said Randy Frederick, managing director of active
trading and derivatives for Charles Schwab in Austin, Texas.
"Momentum names have been driving this market higher. A lot
of these names have been trading at stratospheric valuations,
and on long-term outlooks, that may or may not materialize. The
question is, 'At what point do they get too expensive?' Right
now, I think they're looking a little expensive."
There's a good chance that the selling could spread to areas
beyond the momentum names, Frederick said.
Alexion Pharma was the S&P 500's biggest decliner,
off 7.5 percent at $144.19, followed by Gilead Sciences, down
7.3 percent at $65.48, and TripAdvisor, down 7 percent at
The move was a sharp reversal from the previous day, when
shares rallied after minutes from the latest Federal Reserve
policymakers' meeting showed members were more keen to keep
rates low than previously expected.
The Dow Jones industrial average plummeted 266.96
points or 1.62 percent, to end at 16,170.22. The S&P 500
lost 39.09 points or 2.09 percent, to close at 1,833.09. The
Nasdaq Composite dropped 129.794 points or 3.1 percent,
The S&P 500 closed below its 50-day moving average for the
first time since Feb. 10, wile the CBOE Volatility index,
Wall Street's measure of investor anxiety, spiked 14.98 percent
to end at 15.89, still at historically low levels.
The stock of bailed-out auto lender Ally Financial Inc
fell 4.1 percent to close at $23.98 in its market
Two biotech companies - Cerulean Pharma Inc and
Adamas Pharmaceuticals Inc - also slid in their trading
debuts. Cerulean fell 2.1 percent to close at $6.85, while
Adamas lost 12.4 percent to end at $14.01.
Among Internet-related tech shares, which were among last
year's biggest advancers, Facebook Inc fell 5.2 percent
to end at $59.16, while Netflix Inc sank 5.2 percent to
close at $334.73.
"You've basically more than erased the bounce of the last
two days, so I would imagine any bounce from these levels is
probably going to be met with supply because the market is on
very tenuous legs right now," said Michael James, managing
director of equity trading at Wedbush Securities in Los Angeles.
Volume was high, with 7.5 billion shares changing hands on
U.S. exchanges, well above the 6.8 billion average so far this
month, according to data from BATS Global Markets.
Decliners outnumbered advancers on the New York Stock
Exchange by a ratio of 3.6 to 1. On the Nasdaq, about 6.6 stocks
fell for every one that rose.
(Editing by Jan Paschal)