Tag - SEPR

The major indices were essentially flat for the day, which is to say, they performed better than yesterday. The Dow Industrials finished with a 30 point loss, the Nasdaq posted an 1 point loss, and the S&P 500 finished with a 3 point loss. The small cap benchmark, the Russell 2000 finished with a 1 point decline.

The top small cap gainer was Vista Gold (AMEX:VGZ), up 32%. MDS Inc. (NYSE:MDZ) which posted a 29% gain after it announced one of its divisions has been sold. Acquisition news also took biotech Sepracor (Nasdaq:SEPR) up 26%. Rounding out the top gainers was K V Pharma Class A Shares (KV-A) up 32%, and The Medicines Company (Nasdaq:MDCO), up 28%.

In spite of the recent weakness in the stock market, the sudden surge in Merger & Acquisition activity should be considered bullish.

On the losing side of the small cap market today was Imperial Industries (Nasdaq:IPII), which lost 27%. Imperial makes building supplies, which should explain the weakness.

Shipping company DHT Maritime (NYSE:DHT) lost 21% after posting weak earnings. Tech company SeaChange International (Nasdaq:SEAC) lost 16% on poor earnings.

In light of the recent worry about China's real estate market, it should be no surprise to see China Housing & Land (Nasdaq:CHLN) on the loser list with a 15% loss.

Finally, in typical "buy the rumor, sell the news" action, biotech Sinovac (AMEX:SVA) fell 17% after it signed a supply agreement for its swine flu vaccine with a South Korean company. Terms of the deal weren't disclosed, which no doubt disappointed investors.

Now for other market news…

*****That was quite a sell-off yesterday. We haven't seen a drop that big since the early days of July. Volume was pretty heavy, too. And no sector was spared.

Briefing.com reports that 95% of the S&P 500 was in the red by the close. Financials seemed to have borne the brunt of the decline. The Financial Select Sector SPDR (XLF) was down 5.3%. But if you were holding an inverse ETF like the UltraShort Financial ProShares (SKF) like TradeMaster Daily Stock Alert members were the day wasn't so bad.

The most troublesome aspect of yesterday's sell-off is that it came amidst some pretty good news. The ISM Manufacturing Survey came in much better than expected and pending home sales for July was also much better than expected. Plus, the Wall Street Journal is reporting that the IMF has raised global growth estimates for 2010 again to just below3%.

Of course, oil prices responded to the manufacturing data by posting an early 2% gain. Unfortunately, that turned into a 2.7% loss as the day went on.

*****Cash for Clunker Stocks dominated yesterday's action. Bank of America lost 6%, Citigroup (NYSE:C) was down 9% and AIG (NYSE:AIG) lost 21%. Even more startling, Citi accounted for 20% of the volume on the NYSE.

Such concentrated selling in the financials sector shouldn't be that surprising. Even the bulls have been scratching their heads at the gains AIG and Citi have been making. It remains to be seen if investors can let some of the air out of these stocks without taking the whole market down.

*****Oil is rebounding a bit today. Inventories fell 3.2 million barrels last week.

British Petroleum (NYSE:BP) announced a major find in the Gulf of Mexico. Some are saying it could be more than 3 billion barrels. Along with the massive find by Brazil from a couple weeks ago, we might start to wonder if new supply might affect prices.

Until tomorrow,

Ian Wyatt
Editor
Small Cap Investor Daily

P.S. My book The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks is coming out on September 14 - visit www.smallcapbook.com to learn more. You can also follow me on http://twitter.com/ianwyatt 

Ian Wyatt is the Chief Investment Strategist of SmallCapInvestor.com and author of The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks. You can learn more about his book and receive small-cap stock picks at www.smallcapbook.com.

 

This morning it was reported that payrolls declined at a faster than expected rate and the unemployment rate rose to 9.5%. Neither of these are good news, and the stock market responded with a sharp sell-off. The Dow Industrials fell 212 points or 2.5%, the Nasdaq dropped 49 points or 2.67%, the S&P 500 fell 26 points or 2.8%. Small caps tend to lead, and today was no exception - the Russell 2000 was down 18 points or 3.5%.

Because we are heading into a holiday weekend, volume was on the light side.

Declining stocks outpaced advancing stocks by a 4 to 1 margin. The biggest loser on the day was Discovery Labs (Nasdaq:DSCO). The stock was cut in half after the FDA delay evaluation of the company's infant respiratory distress drug, Surfaxin.

Other top declining stocks include another biotech, Sepracor (Nasdaq:SEPR) which dropped 18% after it released disappointing trial results for a depression drug. The decliners list was littered with regional bank stocks too, including Park Bancorp (Nasdaq:PFED) down 25%, and Starling Banks (Nasdaq:STBK) down 17%.

Ironically, several regional banks made today's top advancing stocks list. Crescent Banking Co. (Nasdaq:CSNT) led the way with a 47% gain. OakRidge Financial Services (Nasdaq:BKOR) rose 25% and Virginia Commerce Bancorp (Nasdaq:VCBI) rose 17%.

NaviSite (Nasdaq:NAVI) rose 23% on heavy volume on news of a lawsuit settlement. And Matrixx Initiatives (Nasdaq:MTXX) rounds out the big winners with a 18% gain.

*****And so it begins. I'm talking about earnings estimate revisions for banks. And yes, they are headed lower. First up is Morgan Stanley (NYSE: MS). Credit Suisse analyst Howard Chen was expecting a profit of $0.80 a share. Now he says a $0.40 loss is more likely.  

Oppenheimer's Chris Kotowski dropped his expected $0.20 per share loss to $0.94 per share.  

Ironically, part of the reason for the downward revisions is Morgan Stanley's credit quality. But even this is misleading. Accounting rule changes earlier this year allowed falling prices for a company's debt to be treated as a profit on the assumption that the company could show a paper profit by buying back debt at a price lower than what it was sold for.  

Make sense. If you sell a bond at $1 and can buy it back for $0,50, you've essentially made $0.50. But of course, no banks actually did this. They didn't have the cash on hand to buy back debt, because one of the reasons a company's debt falls in value is because investors realize the company has assets that are worth less. In the case of the banks, these impaired assets are often non-performing loans or mortgage related securities.  

As these assets fall in value, the banks have to hold more loss reserves. That, of course precludes them from buying back their own debt.  

*****It should be obvious that accounting rules allowing banks to treat falling prices for its own debt as profits is a complete sham. The measure is a bookkeeping trick designed to let the banks appear healthier while they get their act together. It's just buying time.  

Will it be enough time? I don't see how that's possible, and I've outlined my reasoning over the last few days. Basically, unemployment is still rising (the unemployment rate hit 9.5% today) and the improvement in the housing market appears to be temporary based on foreclosure sales and government mortgage assistance. Some see "green shoots" here. I don't. 

*****There's at least one IPO market getting ready to heat up. No, it's not the U.S. It's China. As many as 100 Chinese companies may be getting ready to list their shares in Hong Kong. And many will come calling for inclusion on U.S. indices as well.  
The first company that will float their shares to the public will be a holding company that's constructing high-speed railroads between Shanghai and Beijing. The $5 billion China expects to raise will go to expand other railways. 
Bloomberg reports that since China announced its $585 billion stimulus plan, it's more than doubled its spending on railroads.  

This is more evidence that China is one of the few countries in the world that can actually grow its economy without taking on massive debt. I view this as very bullish and it's why I've been recommending Chinese stocks frequently in my SmallCapInvestor PRO advisory service. To discover what we're buying to take advantage of China's stimulus spending, click HERE. 

*****Here's TradeMaster Daily Stock Alerts' Jason Cimpl with his weekly video chart analysis. I've really been enjoying his analysis. And his TradeMaster readers enjoy the profits it leads to. But I'd like to hear from you.

*****Finally, I want to wish everyone a great 4th of July holiday. And if you're driving, do it safely. Let's get everyone home safe. I'll talk to you on Monday.

Viad Corp. (Nasdaq:VVI), CardioNet Inc. (Nasdaq:BEAT) and Timberland Co. (Nasdaq:TBL) are among the biggest percentage losers in Friday's trading among companies with market capitalizations under $1 billion.

Also included among the results: Susser Holdings Corp. (Nasdaq:SUSS), GigaMedia Ltd. (Nasdaq:GIGM), Intermec Inc. (Nasdaq:IN), Ambassadors Group Inc. (Nasdaq:EPAX), Sepracor Inc. (Nasdaq:SEPR) and Diedrich Coffee Inc. (Nasdaq:DDRX).

Small-cap stocks extended the morning slide into midday trading, as a fresh run of economic data this morning suggested that the economic recession is darkening. Selling interest was heightened by a bevy of awful corporate profit reports, shuffling the previous four days of rallies into the background. Some of today’s small-cap gainers were POZEN (Nasdaq:POZN), OSI Systems Inc. (Nasdaq:OSIS) and Sepracor (Nasdaq:SEPR).

Other Market Watch highlights today included:

• The chart picture took a sudden turn for the worse today, unable to sustain Wednesday’s breakout through the recent trading range highs.  
• Energy shares fell 2.4% as the crude oil market saw the weak economic data and fretted anew about demand destruction in a global recession.  
• Gold shares were mildly higher, but just barely, with the Gold and Silver Index rising about 2%.  
• As you might expect given dreadful home sales numbers & historically high unemployment rolls, homebuilder stocks were getting bruised today.   J
• This morning’s weekly claims report showed that more Americans are now drawing unemployment insurance than at any point in history.  

Small Cap Gainers:

• POZEN informed by FDA that endoscopic gastric ulcer incidence continues to be an acceptable primary endpoint; shares climb 17% in pre-market. See (Nasdaq:POZN). 
• OSI Systems Inc. rose 16% as the electronics system designer received an earnings lift. See (Nasdaq:OSIS).  
• Sepracor rises 10% in pre-market to cut workforce despite rise in profit. See (Nasdaq:SEPR)

Small Cap Losers:

• Online futures and options broker optionsXpress Holdings Inc. fell 14% after reporting earnings. See (Nasdaq:OXPS).
• SurModics Inc. gapped lower and shed nearly 20% as the medical products company took an earnings related hit. See (Nasdaq:SRDX).  
• Inter Parfums Inc. tumbled 23%, wiping out solid recent gains in the process. See (Nasdaq:IPAR).  
• The ISE Homebuilders Index is down 5.7%; small-cap builders Centex Corp. off 5% and Meritage Homes Corp. down 12%. See (NYSE:CTX) and (NYSE:MTH). 

 

Small-cap stocks pushed lower on the opening, pressured by a sloppy batch of earnings reports this morning and another weak slate of economic reports that threatens to break a four-day winning streak for the market. Some of today’s small-cap gainers were POZEN (Nasdaq:POZN), OSI Systems Inc. (Nasdaq:OSIS) and Sepracor (Nasdaq:SEPR).

Other Market Watch highlights today included:

• Crude oil prices have been closely tethered to equities, and today’s rugged economic data reinforces the demand difficulties facing energy companies.   Crude oil prices were on the defensive this morning, with futures off some $1.60 a barrel into the stock market open.  
• The stock market appeared to extend the morning slide after the dreary home sales report.  
• New home sales fell off a cliff today, sinking 14.7% to an annual rate of 331,000 units, way below the forecast of 400,000.  

Small Cap Gainers:

• POZEN informed by FDA that endoscopic gastric ulcer incidence continues to be an acceptable primary endpoint; shares climb 17% in pre-market. See (Nasdaq:POZN). 
• OSI Systems Inc. rose 16% as the electronics system designer received an earnings lift. See (Nasdaq:OSIS).  
• Sepracor rises 10% in pre-market to cut workforce despite rise in profit. See (Nasdaq:SEPR)

Small Cap Losers:

• Banner Corp. fell 15%, gapping lower as the bank holding company announced quarterly results. See (Nasdaq:BANR).  
• Oshkosh Corp. fell 20% as the specialty equipment maker posted a quarterly loss and announced job cuts. See (NYSE:OSK).  
• Arkansas Best swings to loss on 15% lower revenue; stock slides 11% in pre-market. See (Nasdaq:ABFS).  
• DryShips in breach of some loan covenants; shares tumbles over 26% in pre-market. See (Nasdaq:DRYS).