Tag - :SGP

Small-cap stocks gave back a sizable chunk of Monday’s big rally early on today, pressured by concerns that corporate profits are already sloppy and will be further strained by a weak economy going forward. At 9:54 a.m. ET, the Russell 2000 (NYSE:IWM) was down 8.46, or 1.55%, at 538.37.

With no economic reports on tap today, the market will focus on the wave of quarterly earnings coming in. Although the earnings news has been mixed so far, investors clearly are concerned that even the upside surprises were already tainted by very low projections or will be pinched to perform into what appears to be a difficult 2009.

The lift small caps enjoyed Monday from the energy sector appeared on the wane today, with crude oil prices slipping on concerns about demand. Also, commodities in general were likely to be on the defensive as the U.S. dollar was soaring against the euro, climbing 1.25%, which makes commodities priced in dollar terms more expensive (and less attractive to foreign buyers).

Around the world overnight, stocks were mixed, with Japan up 3.3%, Hong Kong down 1.8%, China off 0.8%, Taiwan up 0.2%, Australia up 3.8%, Singapore down 0.9%, South Korea down 1% and India up 4.5%. Europe was in positive territory on news that France would pour some 10.5 billion euros into the banking arena, but the early slide in the U.S. market pulled down Europe.

Back to the earnings story, the one that really seemed to sum up the market sentiment this morning was Texas Instruments Inc. (NYSE:TXN). TXN shares were off 9% shortly after the open as the company projected earnings for the upcoming quarter well below the forecast, which reflects the difficult operating environment for tech companies amid a slumping economy. Also in the tech arena, . . .

A recent study by China's Ministry of Health and the Ministry of Science and Technology said a combination of smoking, poor diet and rampant pollution has caused the nation's cancer rates to swell 80% in the last 30 years, making the disease the leading cause of death in China today, claiming 1.5 million lives every year.

And according to another report published earlier this month, the nation's growing health woes and aging population have caused health-care expenditures to explode. Total health-care spending in China is expected to rise at a compound annual growth rate of 11% between now and 2012.

It should come as no surprise, given the size of the market and the ongoing debate over Chinese drug safety, that regulators at China's State Food and Drug Administration (SFDA) have intensified their oversight and testing measures for drugs. The regulators plan to work closely with their counterparts in the United States, Europe and Australia to coordinate inspections of factories in China that produce pharmaceutical raw materials.

One Chinese company capitalizing on the spike in health-care spending while avoiding drug safety problems is 3SBio Inc. (Nasdaq:SSRX), a Shenyang-based biopharmaceutical products company that specializes in high-quality, low-cost drugs. In stark contrast to the recent disappointing setbacks experienced by a number of other domestic players and multinational pharmaceutical giants such as Merck (NYSE:MRK) and Schering-Plough (NYSE:SGP), 3SBio is thriving.

The company dominates the domestic market (with close to 40% market share) for the drug Epoetin, commonly referred to as Epo, which is used to treat anemia associated with chemotherapy treatments and kidney dialysis by increasing red blood cell production. 3SBio's protein-based therapeutic recombinant human thrombopoietin (Tpo) products, which are used to treat iron deficiency (another side . . .

Small-cap stocks edged higher Monday, bucking a downdraft in other large-cap index products as more good news in the banking arena surfaced. In addition, movement into smaller energy and commodity stocks provided a lift to the Russell 2000 (NYSE:IWM). The small-cap benchmark gained 4.55, or 0.66%, to 697.63.

Large-cap indices also were pulled down by a slump in pharmaceuticals, with Merck and Co. (NYSE:MRK) and Schering-Plough (NYSE:SGP) taking a dive ahead of earnings on news that the cholesterol drug Vitorin didn’t deliver the goods in a heart study. The slide in pharma shares came despite a jump in Genentech Inc. (NYSE:DNA) shares on news of a buyout offer from Swiss firm Roche Holdings.

In today’s action, large-cap stocks also appeared to be more troubled by a bounce in crude oil prices than did small-cap shares. Crude oil prices rose $2.16 dollars a barrel, or 1.6% to $131 as the market braced for the first storm event of the year. Tropical Storm Dolly could reach hurricane status Tuesday as it moves into the Gulf of Mexico, but for now the storm track seems unlikely to create a major supply disruption out of Gulf production.

Energy markets also likely were underpinned by a soft tone in the U.S. dollar to start the week. The greenback slipped about 0.5% against the euro and about 0.2% versus the yen, which provided a lift to some commodities markets, including gold and copper. The iPath GSCI Total Return commodities index was up about 1.5% on the day.

Once again, the bullish side of things was dominated by a surprise earnings report in the banking sector. Last week, Wells Fargo & Co. (NYSE:WFC), JP Morgan (NYSE:JPM) and Citigroup (NYSE:C) all beat the Street’s forecast and today saw Bank of America (NYSE:BAC) top expectations. The recent spate of good news on the banking front has helped to shore up negative sentiment toward . . .

Small-cap stocks are treading higher in afternoon trading, boosted by healthy earnings on the banking front and mergers and acquisitions news. At 2:07 p.m. ET, the Russell 2000 (NYSE:IWM) was up 2.96, or 0.43%, at 696.04. As oil prices rose and two pharmaceutical blue chips delayed reporting their quarterly results, the broader market was down in afternoon trading. The Dow lost 36.88, or 0.32%, to 11,459.69.

The leading indicators report, which came out at 10:00 a.m. ET, was in line with the forecast for a dip of 0.1% and had almost no immediate impact on the market. Overall, this is a very light week for economic data, but it will be a huge week for earnings results.

Pharmaceutical giants Merck & Co. (NYSE:MRK) and Schering-Plough Corp. (NYSE:SGP) delayed releasing their second-quarter earnings until after the closing to let researchers report results from a study of a cholesterol drug marketed by the two companies in a joint venture.

In what has become an ongoing trend, a major U.S. bank has posted better-than-expected earnings. This time around, the good news was from Bank of America (NYSE:BAC), as the nation’s largest retail bank topped the Street earnings forecast and jumped 7% in the afternoon session. The earnings surprise follows on the heels of better-than-expected results last week from Wells Fargo & Co. (NYSE:WFC), JP Morgan (NYSE:JPM) and Citigroup (NYSE:C).

Within the financial spectrum, government-sponsored mortgage lenders Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) were solidly higher this morning in the wake of weekend comments from Treasury Secretary Henry Paulson, who said that he expects Congress to quickly pass his bail-out program for GSEs. Paulson . . .

The Russell 2000 (NYSE: IWM) futures are slightly above their close level on Friday on news of corporate deal-making.

Search engine Yahoo! Inc. (Nasdaq: YHOO) will reject a $45 billion bid from Microsoft Corp. (MSFT), according to news reports over the weekend. The Redmond, Wash.-based software giant will in turn take its offer directly to shareholders.

More mergers and acquisitions news is coming from networking solutions provider Nortel Networks Corp. and telecommunications heavyweight Motorola Inc. (NYSE: MOT), which are in talks to merge their wireless infrastructure divisions, according to The Wall Street Journal.

There are no economic report releases to navigate on Monday, and outside volatility looks calm until we get to Wednesday morning’s Retail Sales report. Look for support Monday at 688 and 680, while resistance is at 712 and 721.

CoolcatReport.com publisher Kevin Kennedy uses a proprietary trading and screening system, based in large part on momentum. For example, the stocks that make his buy list must be trading above their closes of 3, 6 and 12 months ago. In addition, they must have made new 52-week highs in the past two months.

Generally, Kennedy prefers stocks that have made new highs, have pulled back in a consolidation pattern, and are then poised to again move to new highs.

This basic strategy is applied to a wide range of stock ideas through his multiple Coolcat newsletter services. Small caps are featured in his Coolcat Explosive Small Cap Growth Stock Report.

“This batch of stocks is hanging out just above its 50-day moving average, offering some interesting entries with decent risks,” Kennedy says. “All have put earnings season to bed and appear well-positioned to move up from here.”

Passing Kennedy’s screening process is a trio of biotech stocks. Metabasis Therapeutics Inc. (Nasdaq: MBRX), says Kennedy, has a “promising pipeline” of preclinical and clinical product candidates targeting metabolic diseases such as diabetes, hyperlipidemia and obesity.

He notes that first-quarter revenues jumped 252% to $3.4 million, which included a $1.8-million upfront license fee received from Schering-Plough Corp. (NYSE: SGP) and license fee and sponsored research revenue from its hepatitis C collaboration with Idenix Pharmaceuticals Inc. (Nasdaq: IDIX).

The company – with a market cap of $243 million -- had $71.3 million in cash, cash equivalents and securities at the end of March, Kennedy notes.

Meanwhile, BioImaging Technologies Inc. (Nasdaq: BITI), with a market cap of $78 million, offers services to support the pharmaceutical, biotech and medical device industries in product development.