Tag - Heb

Stocks finished lower today with the Dow ending seven straight trading sessions closing up. The Dow closed down 35 points to 8,881 while the Nasdaq was up 10 point to close at 1,926 and the S&P 500 edged lower by half a point to close at 954.

The Russell 2000 was up just over 3 points to close at 529.

Leading small-cap price gainers include Media General (NYSE:MEG) up 84% on news that its Q2 EPS was $0.90 versus an EPS loss of $25.12 last year. Much of the firm's gains were attributed to cost cutting measures and selling off a Panama City, Florida television station WMBB and Alexandria, Louisiana television station KALB. Both stations were purchased by Hoak Media.

Other small-cap gainers for today include Somaxon Pharmaceuticals (Nasdaq:SOMX) up 31%; Dynavax Technologies (Nasdaq:DVAX) up 24%; and Reddy Ice Holdings (NYSE:FRZ) up 22%.

Small-cap decliners include Hemispherex Biopharma (AMEX:HEB) down 27%; Aaron's Inc. (NYSE:AAN) down 14%; and Fuqi International (Nasdaq:FUQI) down 13% after announcing a proposed public offering of 4.5 million shares of common stock.

*****Fed Chief Ben Bernanke went before Congress yesterday to reassure lawmakers that he has an exit plan for his inflationary monetary policies. And apparently the markets were soothed by his plans, because everything rallied - bonds, stocks and the U.S. dollar. 

Most importantly, Bernanke has been pretty adamant that inflation is not a threat right now. Prices are still falling for homes and commercial real estate. Demand for oil is down. Unemployment is rising. None of these conditions suggests that more money will be entering the economy in the form of spending.  

What's his plan, you ask? He didn't say exactly. But it will involve higher interest rates and hopefully Treasury buybacks. 

*****Interestingly, Congress is very interested in problems with the commercial real estate market and what the Fed plans to do about them. Right now, $108 billion in commercial real estate is either in default, foreclosure or bankruptcy. That's the double the dollar amount since the start of the year.  

I'm not sure exactly what Bernanke can do about this. The Fed and the Treasury have made it possible for banks to make some money. That, in turn, will give the banks more ability to offset bad assets currently on their books and increase loss reserves for looming problems, like commercial real estate.  

But ultimately, we are seeing an actual deflationary spiral in the real estate sector. There's too much supply and not enough demand and prices are falling. Eventually, as we saw with my 7-Eleven story from yesterday, real estate will move from weak hands too small hands. But prices have to be attractive. Also, given my expectation that unemployment will remain high and the U.S. economy will grow weakly for a few years, it's highly likely that some real estate will simply remain dormant.  

*****Earnings season is rolling along. Apple (Nasdaq:AAPL) beat expectations handily. But the company guided revenues for the rest of the year slightly below consensus. I thought that might be a problem, but apparently not. The stock's up 4%, even after a 10% rally last week.  
 
 Yahoo! (Nasdaq:YHOO) and US Bancorp (NYSE:USB) have reversed early losses to trade in the green. After a long consolidation for stock prices, it looks like we might be breaking out for another upside move. But after the move we've seen over the last seven trading days, I can't help but to be a little skeptical.  
 
Best Regards,

Ian Wyatt
Editor
SCI Daily

Shares of Hemispherx Biopharma, Inc. (AMEX: HEB) sunk to a new 52-week low in pre-market trading this morning after the biopharmaceutical company said it will end its licensing agreement with Laboratorios Del Dr. Esteve, S.A.

The agreement, which gave Esteve the right to market Ampligen for CFS in Spain, Portugal and Andorra, was terminated on Esteve’s non-performance of certain contractually required clinical trials.

Hemispherx said in a press release, “negotiations were ongoing but amicable resolution could not be reached.”

Shares of Hemispherx Biopharma (HEB) tumbled 20.16%, or $0.26, to $1.03 in pre-market trading. Share of Hemispherx Biopharma have been trading in the range of $1.06 to $2.49 for the past 52 weeks.