Despite Vertex’s 40% surge after positive news about its cystic fibrosis drugs, the market had its biggest decline in two weeks, led by a sell-off in blue-chip bank and energy stocks. Builders gained, though after new-home sales rose in May to a six-year high. Traders tied the selling to mutual funds’ portfolio rebalancing and to the violence in Iraq. The selling in blue chips marks a recent and notable change in behavior. Stocks of large, diversified companies have been among the most popular with investors this year. But as a quarter ends it’s not uncommon for investors to sell some of the best- performing names to rebalance their portfolios.
Snapshot