Ongoing concerns about the Federal Reserve and the state of the economy continued to weigh on the major U.S. equity indices on Monday. Stocks recorded their fourth consecutive day of declines. The Nasdaq led the retreat with a slide of 1.5%.
Cannabis stocks were among the standout decliners on the day. An adverse development in Washington prompted selling in names like Cresco Labs (OTCQX:CRLBF), Trulieve Cannabis (OTCQX:TCNNF), Green Thumb Industries (OTCQX:GTBIF), Curaleaf Holdings (OTCPK:CURLF), Columbia Care (OTCQX:CCHWF), Tilray Brands (TLRY) and Canopy Growth (CGC).
Broad weakness among tech heavyweights contributed to Wall Street’s downdraft. This included another retreat by Amazon (NASDAQ:AMZN), which set a new 52-week low.
Looking to the upside, Cerevel (CERE) jumped more than 20% after the release of clinical trial data. Study results also prompted buying in Madrigal Pharmaceuticals (MDGL), which more than tripled in value to reach a 52-week high.
Sector In Focus
Cannabis stocks suffered a major setback after a failed legislative maneuver in the U.S. Congress. The attempt was meant to push forward provisions aimed at opening up banking for the industry.
According to Marijuana Moment, lawmakers had attempted to include the SAFE Banking Act in an omnibus spending bill, but the gambit fell short. Wall Street interpreted this move as severely limiting the chances the legislation will get passed in the current lame-duck session of Congress.
Hurt by the news, Cresco Labs (OTCQX:CRLBF) and Trulieve Cannabis (OTCQX:TCNNF) slumped 18%. Green Thumb Industries (OTCQX:GTBIF) retreated 12%, Curaleaf Holdings (OTCPK:CURLF) dropped almost 17% and Columbia Care (OTCQX:CCHWF) declined about 20%. Elsewhere in the sector, Tilray Brands (TLRY) and Canopy Growth (CGC) posted declines of 9% and 7%, respectively.
Clinical trial data sparked buying in Cerevel (CERE), which surged 22%.
The company said a Phase 1 trial of its emraclidine product showed that the potential treatment of schizophrenia doesn’t lead to significant increases in blood pressure. In addition, the study also showed that emraclidine was well tolerated.
CERE finished trading at $31.01, a rally of $5.66 on the day. With the advance, the stock jumped above a recent trading range to reach its highest level since early September.
Notable New High
Madrigal Pharmaceuticals (MDGL) skyrocketed in the wake of strong late-stage clinical trial results. The stock soared 268%, jumping to a fresh 52-week high.
The company said a Phase 3 trial of its resmetirom product showed positive topline results. The drug was being tested for nonalcoholic steatohepatitis and liver fibrosis.
Based on the data, MDGL closed at $234.83, a rally of $171.03 on the day. Shares also reached an intraday 52-week high of $236.39.
Notable New Low
Amid worries about interest rates and the health of the economy, Amazon (AMZN) extended a recent string of declines, sliding to a new 52-week low. This came as shares dropped another 3%.
AMZN dropped $2.94 to close at $84.92. During the day, shares also reached an intraday 52-week low of $84.51.
The slide marked the fourth consecutive day of declines. This added to weakness seen earlier in the year. AMZN has fallen nearly 22% in the past six months. The stock is also down 50% since the close of 2021.
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