Tag - Lly

A bleak picture of the nation’s employment picture sparked a solid opening decline for small-cap stocks. Bearish momentum was furthered by a batch of weak profit reports and outlooks for various companies, but another firm tone in commodities offered up support. At 9:57 a.m. ET, the Russell 2000 (NYSE:IWM) was down 4.03, or 0.85%, at 472.37.

The weekly unemployment claims report headline figure came in at 573,000, which swamped the forecast of 525,000 and which was a cycle high so far in the economic malaise. What’s more, it also marked the highest claims number in 26 years. Even more scary is that the number of continuing claims, which tracks people who are out of work and just can’t get a job, rose to 4.429 million, way above the 4.1 million forecast and the highest point since November 1974. It has been fashionable to rally on “bad” economic news lately amid ideas that the market will be forward looking and rally away from the lows long before the news bottoms out, but it is difficult to look past numbers as bad as today’s claims report – especially if you don’t see things getting better for some time to come.

“Although the labor force is much larger now that it was 25 years ago, the number of people actually covered by unemployment insurance has declined substantially,” Steven Wood, chief economist with Insight Economics, said in an email. “More importantly, the deterioration in initial claims, continuing claims, and the insured jobless rate has been as bad as they were during the 1981-1982 recession, which was the most severe in the post-World War II period. Although these data are not for the survey week, they suggest another substantial decline in payroll employment and another jump in the unemployment rate for December.”

The International Trade report also came out this morning and the deficit widened to $57.19 billion, well above the forecast for a deficit of $53.5 billion. The U.S. dollar extended overnight losses against the euro after the report, with the . . .

Small-cap stocks remained unsettled this morning, unable to embrace Friday’s rescue plan package as equity markets around the world seized up and credit pipelines remained clogged despite massive additional liquidity injections this morning by the Federal Reserve. At 9:50 a.m. ET, the Russell 2000 (NYSE:IWM) was down 19.38, or 3.13%, at 600.02, slipping to the lowest point on intraday charts since May 2005.

In Europe, extraordinary measures were taken over the weekend on the banking front, with France’s BNP Paribas buying assets of beleaguered Fortis, while in Germany a rescue deal for Hypo Real Estate was sweetened by another 15 billion euros of liquidity, adding to an earlier pledge of 35 billion euros.

Everyone has been talking about the Federal Reserve slicing the Fed funds rate, but that rate has already been trading well below the current 2% rate in the market. This morning, the Fed increased the size of its cash auctions and also offered banks interest accrual on reserves. Stock index futures did pull off the overnight lows heading into the open on the Fed injection news, but the inability to stabilize financial markets in the direct aftermath of the $850 billion financial bailout bill Friday reflects just how deep the crisis is running.

Looking at market action around the world, European shares were off nearly 5% into the U.S. stock market opening. Elsewhere, Russian stocks tumbled some 15%, prompting various exchange trading halts. Japan was down 4.9%, Hong Kong off nearly 5%, China down 5.1%, Taiwan down 4.1%, Australia off 3.3%, Singapore down 5.6%, South Korea off 4.2% and India down 5.7%.

Market research experts at Goldman Sachs slashed their economic forecast for growth and interest rates “substantially” in a report issued Friday afternoon. Goldman said “The recession that we have been forecasting now looks likely to be deeper and longer, taking the unemployment rate to 8% by late 2009 and pushing the . . .

Small-cap stocks are expected to open sharply lower, pressured by concerns about the global credit contagion and a leap in unemployment claims to seven-year highs which completely offset any optimism tied to the Senate’s approval vote for the financial rescue plan. The Russell 2000 (NYSE:IWM) is expected to open about 1% lower, which would translate to an open near 664.50.

The weekly claims report came in at 497,000, which was way above the forecast of 468,000. In addition, the government revised last week’s number slightly higher. The somber claims figure will only sour the mood in front of Friday’s big monthly Labor Department report on payrolls and the unemployment rate.

The Senate passed the rescue plan by a vote of 74 to 25, and the revamped bill will now move over to the House for a vote, which will likely take place Friday. With the addition of tax cuts and FDIC bank deposit measures, the House is expected to pass the bill.

If the jobs report Friday comes out with bad news (like another rise in the unemployment rate), it would be hard to anticipate that the House would be willing to risk not passing the $700 billion bailout.

The Senate was expected to pass the revamped “Paulson Plan” rescue bill, and in a classic case of “buy-the-rumor, sell-the-fact” stock markets around the world did not stage an immediate relief rally on the Senate’s OK. European shares . . .

Small caps are continuing to bleed red in Monday’s trading. At 1:46 p.m., the Russell 2000 (NYSE:IWM) is down 0.82%, or 5.9, at 715.17. After Friday’s big rally, the index slipped in early trading today, broached the 718 mark briefly, and then continued to slide.

The market is digesting results from drug makers Eli Lilly (NYSE:LLY) and Merck & Co. (NYSE:MRK), and from the second largest American bank, Bank of America (NYSE:BAC). Bank of America shares were lower after the regular opening, down about 2.5% as investors appear less willing to extend an olive branch to sluggish results, especially compared to the reaction last week that was seen on Citigroup’s (NYSE:C) earnings.

As for the drug makers, the news was mixed, with Eli Lilly tumbling about 4.5% on sloppy results, while Merck slipped about 0.1% despite beating the estimate.

Among small caps, Packeteer Inc. (Nasdaq:PKTR) is rising more than 12% on news that the company was set for acquisition, and North American Galvanizing & Co. (Nasdaq:NGA) was up about 7% into the opening as the company topped earnings forecasts.

On the downside, Aladdin Knowledge Systems Inc. (Nasdaq:ALDN) tumbled about 27% after missing the earnings forecast. MedCath Corp. (Nasdaq:MDTH) is down about 17% after the Charlotte, N.C.-based health-care provider estimated its second-quarter and fiscal 2008 earnings far below Wall Street expectations.

Small-cap stocks began Monday in the red: at 9:54 a.m. ET, the Russell 2000 (NYSE:IWM) was down 2.67, or 0.37% at 718.40. The index’s early low was at 716.72, slipping through the first line of defense from Friday’s big rally at 718, and now faces short-term chart support at 714, then down at 709.

The focal point early this week will likely be on earnings news and the credit crunch. Overseas, the Bank of England announced the opening of a credit window that would allow banks to swap out risky mortgage debt for U.K. government bonds, a similar function to what the Federal Reserve did several weeks ago to help bail out limping financial firms. The immediate response from European equities was lukewarm, however, so it may take more time to play out. The uncertain response to the Bank of England’s move means that the credit issue will likely remain on trader radar screens early this week.

The U.S. dollar was lower overnight, and crude oil shot to yet another record high price, which clearly puts a little bit of a damper on bullish psychology from last week’s big surge in small caps. The Lundberg survey of some 7,000 gas stations reported a new high pump price of $3.47 per gallon, up $0.04 from two weeks ago. Combine record oil prices with soaring food prices, sluggish home values and . . .

Bette Davis once said “old age is no place for sissies,” and to a degree, she was right. Old age not only brings wrinkles, but serious diseases such as Alzheimer’s and diabetes. Two drug companies that want to make the transition into your golden years a bit more tolerable are Transition Therapeutics Inc. (Nasdaq:TTHI) and Sirtris Pharmaceuticals Inc. (Nasdaq:SIRT).

Both companies have ample cash for funding further development efforts and have made noteworthy progress over the last year advancing lead compounds. While Transition and Sirtris are likely several years away from commercial sales, their drug candidates address huge, growing markets, estimated at hundreds of millions of patients worldwide, and have significant future revenue potential. 

Transition is developing novel drugs for treating Alzheimer’s disease and Type 2 diabetes. Its lead compound, ELND005, for the treatment of Alzheimer’s disease, works by breaking down neurotoxic fibrils in the brain and allowing certain peptides to clear the body before they can form plaque. Alzheimer’s disease is the fourth leading cause of death among U.S. adults and has no cure; it begins with memory loss and eventually progresses to overall loss of cognitive function. Most Alzheimer’s patients die within eight years of diagnosis. More than 30 million people worldwide currently suffer from the disease and their numbers are expected to increase dramatically as the number of seniors grows.

The company is partnering with Elan Corporation (NYSE:ELN) to develop and commercialize ELND005. Phase II clinical trials of the drug involving some 340 patients with mild to moderate Alzheimer’s disease began last December and are expected to last approximately 18 months. To help fund the trials, Transition received milestone payments from Elan totaling $7.5 million last October and $5 million this January.

Transition is also developing TT-223 for the treatment of Type 2 diabetes. TT-223 works by regenerating the body’s insulin-producing cells. Diabetes is the world’s fastest-growing disease; there are more than 200 million diabetics worldwide and it is estimated one in 10 patients will eventually die from complications of the disease. Type 2 diabetes accounts for 90% of all cases and usually develops in adulthood. Transition is partnering with Eli Lilly & Co. (NYSE:LLY) to develop and . . .

Nanotechnology is still a business of the future. Although great strides have been made in creating the technology of the ultra small, very few commercial products have yet made any money for their developers. Altair Nanotechnologies, Inc. (Nasdaq: ALTI) is a case in point. The Reno, Nev.-based company has so far delivered just 61 products — lithium ion batteries for electric cars — and those cars have yet to hit the market.

But the company has several development contracts and joint ventures with big corporations in the works, including paint maker Sherwin-Williams Company (NYSE: SHW) and drug makers Eli Lilly & Co. (NYSE: LLY) and Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI). If those ventures play out successfully, its tiny particles could prove to have a very big future.

Altair was founded in 1973 under the name Diversified Mines Limited, acquiring and exploring mineral properties. For three decades it was a lackluster business. So in late 2003 it restructured with an eye on the future of Nanoparticles. CTO Bruce Sabacky, who has been with Altair since 1999, the year the company went public, began developing products based on nanomaterials.

In 2004 the company brought in a new CEO, Alan Gotcher, from Avery Dennison Corporation (NYSE: AVY), where he had led the development and commercialization of the “Duracell On-Cell” tester for the popular batteries. He has been moving the company’s new technology into commercial products.

From a peak of nearly $8 per share in 2000, the stock dropped to penny stock territory by mid-2003. It has steadily recovered since then, closing at $4.43 on Monday, with a market cap of $312 million, and is now flirting with the low end of analysts' targets. Three brokers polled by Thomson/First Call have price targets ranging from $5 to $6. Its 52-week high is $5.45, reached in October, and the low was $2.48, reached in January.