The coronavirus pandemic is throwing a spotlight on stocks in the U.S. healthcare sector, home to the companies that could develop treatments, vaccines and improved diagnostics needed to tackle the greatest public health crisis in a century.
Healthcare .SPXHC has held up better than most S&P 500 sectors. Since the S&P 500 hit an all-time high on Feb. 19, healthcare is down about 18% as of Wednesday, while the benchmark index .SPX has tumbled 27%.
The sector is typically considered a defensive area of the market because some investors believe consumers will continue buying healthcare products even during uncertain times.
Shares of pharmaceutical and biotechnology companies have led the pack, including those working on potential treatments and other ways to address the rapidly spreading outbreak.
In particular, shares of Regeneron Pharmaceuticals Inc (REGN.O) and Gilead Sciences Inc (GILD.O) have risen 24% and 8%, respectively, since the S&P hit its peak.
“A lot of these companies are working on a solution to the problem,” said Walter Todd, chief investment officer with Greenwood Capital in South Carolina. “We can debate what it means to them ... monetarily, but perception-wise they are viewed as a safe haven because of that.”
NEW YORK (Reuters)