A Turn for the Worse for Biotech Stocks

Bear markets have been rare lately. Biotechnology is a glaring exception.

The sector was a hot investment for most of this decade, but things have changed for the worse. A broad index of biotechnology stocks is down about 20% over the past year. That badly lags behind the Nasdaq Composite, which is essentially flat. This underperformance has occurred while bond yields have fallen sharply. Ordinarily, that would be supportive of speculative, often unprofitable companies like many in biotech.

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