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Life Technologies Corp. (LIFE), Affymetrix, Inc. (AFFX): Why Did My Stock Just Die?

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Just the other day I remarked how often the Dow Jones Industrial Average (Dow Jones Indices:.DJI) got saved by late-afternoon rallies that limited the damage done during the day. Yesterday, however, the index flipped the script, and despite ending the day 60 points higher and hitting a new all-time record of 14,673, it was actually a late-afternoon sell-off that kept the Dow from finishing even higher.

Affymetrix, Inc. (NASDAQ:AFFX)

While the gains in the index were broad and deep, the few losses recorded on the day were rather shallow, the worst being the 0.6% loss by The Procter & Gamble Company (NYSE:PG). Yet consumer products in general were soft as The Clorox Company (NYSE:CLX), Colgate-Palmolive, and Kimberly Clark Corp (NYSE:KMB) all closed down, though each by less than 1%.

Consumer confidence was buffeted in March as those who thought the economy was in good to excellent shape fell to 18% of respondents in the Discover U.S. Spending Monitor survey, while those who rated it fair increased to 34%. Half of those surveyed, however, expect the economy to worsen, and unsurprisingly those who made $75,000 or more a year thought things were better than those making less. The Bloomberg Consumer Comfort Index was also still in negative territory, even if it was above its lows.

It’s in the genes
Elsewhere in the market, however, Affymetrix, Inc. (NASDAQ:AFFX) tumbled more than 13% after preannouncing first-quarter earnings that missed even its own expectations. It blamed “headwinds” in its gene expression business everywhere it does business, though it suffered a particular shortfall in Japan. The Fool’s Sean Williams thinks that may indicate more than a one-off performance issue because of the global nature of the miss Affymetrix, Inc. (NASDAQ:AFFX) suffered.

Competition has been fierce among gene sequencing firms, but for the right players, business has been good. Life Technologies Corp. (NASDAQ:LIFE) is being wooed by a number of suitors, including a bevy of private equity firms along with Thermo Fisher who all want access to Life’s leading genetic sequencing equipment. Bids north of $11 billion are expected, which is said to be the biggest buyout in the space since Thermo Electron bought Fisher Scientific for almost $13 billion in 2006 to create Thermo Fisher.

That may end up being one hope for Affymetrix, Inc. (NASDAQ:AFFX) investors, that it ends up getting a bid from one of the losers in the process or still others looking to break in. Illumina, Inc. (NASDAQ:ILMN) was approached by Roche last year, but the pharma giant wouldn’t raise its $6.8 billion offer and walked away, while Danaher Corporation (NYSE:DHR) was said to have at least a passing interest in Life Technologies.

Although Affymetrix, Inc. (NASDAQ:AFFX)’s shares are up 26% so far in 2013, yesterday’s sharp decline puts them 25% below their 52-week high. That may make it vulnerable, and with a global slowdown in its business, perhaps an attractive alternative.

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