Here’s why Danaher shares fell 4% on Thursday — a week after hitting record highs

By News Room Last updated Jun 13, 2024

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Stocks little changed: Markets were mixed to lower Thursday following a rally to new record highs Wednesday. Treasury yields dipped after yet another inflation data point — May’s producer price index — that was cooler than expected. But the relationship between falling yields and rising stocks isn’t working to the same degree as previous sessions, although a good 30-year auction at 1 p.m. ET helped the market bounce. However, gains were mostly limited to AI-related tech stocks, following Broadcom ‘s strong earnings report on Wednesday. Shares of the chipmaker surged 13%. More cyclical areas of the market, including industrials, energy, and financials, fell. Danaher stumbles : When defensive stocks are outperforming — as they were Thursday — healthcare stocks typically outperform. That isn’t playing out and, puzzlingly, Danaher shares were hit hard without anything specifically tied to the company. After making a new 52-week high of about $268 per share last Thursday, the stock has traded almost straight down and sits at about $254 after a roughly 4% pullback Thursday. The only news we see in the space Thursday is out of Repligen , which fell more than 10% after announcing its longtime and well-respected CEO Tony Hunt will transition to an executive chair role. When a company announces a change to its CEO or CFO intra-quarter, sometimes it follows with a reaffirmation of guidance to calm investor nerves. However, Repligen did not include anything about its guide in the press release. Analysts at Stifel wrote that when management was asked about the missing update, they explained it was because there are still a few weeks left in the quarter and they want to wait until earnings in August. According to Stifel, Repligen called the transition timing “ideal.” Anytime there’s uncertainty in an individual stock or industry, investors tend to shoot first and ask questions later and that seems to be playing out within the life sciences space Thursday. While we cannot speak to Repligen’s outlook, the market may be reading way too far into this news for Danaher, a higher-quality company that has been very conservative in its shaping of the bioprocessing recovery. The industry is worth monitoring, but right now it appears the magnitude of Danaher’s pullback is an overreaction. Up next: We’re mostly through the big events of the week. Earnings after the bell from Adobe could be interesting given the challenges enterprise software is experiencing, especially as many see it being disrupted by generative AI. On the data front Friday, we’ll get the latest university of Michigan sentiment and inflation expectations figures. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Market information is displayed on monitors as a trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 4, 2024.

Andrew Kelly | Reuters

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.

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