Tag - Wye

Stocks are down as of press time, 12:00 P.M. Eastern. The Dow is down 17.08 points at 9,263.89; the Nasdaq is at 1,979.74 and quickly retreating from it's Tuesday closing high of 2,009.40; and the S&P 500 is down below 998.82.  

Most active small-cap decliners in the morning session include Orthovita (Nasdaq:VITA) down 29%; Health Fitness Corporation (AMEX:FIT) down 26%; and Sunrise Senior Living (NYSE:SRZ) down 23%. 

Small-caps bucking the trend and actively rising include a former SmallCapInvestor.com PRO holding, SXC Health Solutions (Nasdaq:SXCI) up 28% on reporting Q2 2009 EPS numbers 41% higher than the year ago period and raising guidance for 2009 with an EPS of $1.70, up from $1.62.  

Other small-cap gainers in the morning session include Home Inns & Hotels Management (Nasdaq:HMIN) up 25% and Ambac Financial Group (NYSE:ABK).

*****Yesterday, the Challenger jobs report showed more jobs were lost in July than expected. It wasn't a big miss, but it was a miss. And after buyers stepped in early, the market's reaction wasn't a big one, either. By the end of the day, the Dow Industrials lost 30-some points.  

I've been pointing out how the market just doesn't seem to have much downside. Yesterday's job loss news wasn't a disaster, but it wasn't good. But investors stepped in and pushed stocks well off their lows.  

The Fed has made money cheap, and it's going into the stock market. There's been a lot of talk that there's a stock market bubble in China because investors there are putting money from government stimulus efforts into the stock market. Nobody's saying that about the U.S. stock market, but that is what's happening. 

This is the "false trend" I was referring to with the George Soros quote from the other day. We should understand that this trend will most likely be proved false at some point. The question is, when? 

*****Today, jobless claims came in lower than expected. That's going to put stocks on better footing. Of course, continuing claims rose. But investors are having the sense that the U.S. economy is stabilizing, so they are buying stocks.   

In my Recovery Portfolio, I'm about to lock in a virtually risk-free 14% gain on drug maker Wyeth (NYSE:WYE). Pfizer (NYSE:PFE) announced that it would acquire Wyeth on January 6 in cash and stock deal. I bought Wyeth when Pfizer stock was low. My purchase price was essentially locked in by the acquisition terms. There was nothing but upside. And as Pfizer has recovered along with the market, my investment in Wyeth has done well.  

If you'd like to learn about the "aggressive approach to conservative investing" that's driving my Recovery Portfolio, please click here. 

*****Cisco (Nasdaq:CSCO) CEO John Chambers is one of the best CEOs there are. He's a straight-shooter, telling investors "…not to get too far ahead of themselves…" concerning Cisco's earnings report and forecast.  

In a nutshell, the last quarter was pretty good for Cisco, but the company still faces challenges. His advice is valid for all investors. Just check the retail sales data out this morning. The economy may be stabilizing, but retail is experiencing challenges. Sales were down around 5% across the board. And that trend has been in place for months.  

Let's not get too far ahead of ourselves.  

******Treasury Secretary Timothy Geithner claims the government made a 23% profit on its bailout of Goldman Sachs (NYSE:GS). Now, Morgan Stanley is about to buy back a warrant it sold the government for $950 million.  

There's no word what the government's profit is on this, but there should be no doubt that there is one. And that's how it should be, so far as I'm concerned.  

If these banks need money, the government shouldn't be a lender of last resort. It's an investor, and should be rewarded. And don't forget, favorable government policies are allowing banks to profit. So again, the government should be rewarded for the risk it takes.  

*****Yesterday, my first monthly column appeared in The Burlington Free Press, the daily newspaper in the state of Vermont. The first column is Investing in Vermont: Profits await clean energy investors. In this column I discuss investing in the clean energy sector, and offer readers three ideas - including two mutual funds and one ETF. You can read the column by clicking here.  

*****The Managed America web video conference is coming up next Monday, August 10 at 6:00 P.M. It's free to attend and you can register right now. Click here to register for this free online event.  

Ian Wyatt

Editor

Daily Profit 

P.S. Don't forget that with tomorrow's edition we'll once again bring back Jason Cimpl, lead technical analyst from TradeMaster Daily Stock Alerts to give you his assessment on the market and his call for next week's trades. You can catch a replay of last Friday's video: click here.

Small-cap stocks eked out a modest advance Monday, enduring an up and down session in which better-than-expected economic data and enthusiasm about M&A activity dueled with bank worries and job loss jitters. In the end, the Russell 2000 (NYSE:IWM) closed up 5.70, or 1.28%, at 450.06. For the New Year, the Russell is now down 9.9%, while the Dow is off 7.5% and the S&P 500 is down 7.3%.

On the data front this morning, reports on existing home sales and leading indicators both beat the forecast for a rare upbeat showing out of economic data. The National Association of Realtors said that existing home sales rose 6.5% in December to an annual rate of 4.74 million units, well ahead of the projection of 4.40 million. As for leading indicators, the Conference Board said that an index of economic indicators rose 0.3% in December, which also was a much better showing than the forecast for a drop of 0.3%. It also marked the first rise in leading indicators since June.

The market will get more information on the housing sector via Thursday’s new home sales report, but the bulk of homes sold in America come via existing home sales, so today’s report was truly a ray of sunshine for a market that is teetering back on the verge of the bear market lows from November. The Russell is now down more than 13% from the January peak and last Friday generated the lowest weekly close since those bear market lows were carved out in November and the second-lowest weekly finish in more than five years. There is a large segment of market watchers who believe that the economic collapse started in the housing arena and the recovery won’t start until home prices stabilize and start to work higher. That camp got a rare positive signal today.

In addition to the economic data, a massive acquisition in the pharmaceutical arena was announced this morning before the open, with Pfizer Inc. (NYSE:PFE) — the world’s largest pharma firm — announcing plans to buy Wyeth (NYSE:WYE) for $68 billion, the largest deal in that sector for years. Pfizer shareholders didn’t care much for the news because the company will cut dividends to help pay for the purchase, and PFE shares retreated some 10%. From an overall market standpoint, . . .

Small-cap stocks remained higher into mid-session, bolstered by a big acquisition on the pharma front, which sparks hope that small caps are undervalued overall. If there are deals being done for large caps, then there should be attractive acquisitions for a bevy of smaller companies. In addition, a surprisingly strong showing on existing home sales also provided a lift to the market. Some of today's small-cap gainers were RXi Pharmaceuticals Corp. (Nasdaq:RXII), WellCare Health Plans Inc. (NYSE:WCG) and StealthGas (Nasdaq:GASS).

Other Market Watch highlights today included:

• Looking at sector activity today, metals and mining stocks were the strongest performing group in the S&P.  
• Energy prices and stock market direction have been trading hand-in-hand of late, so the rise in equities clearly supported crude oil.
• Energy stocks were on a roll today, up 2.9%, mirroring a 3% climb in cash crude oil prices.  
• Small caps remained higher, bolstered by a big acquisition on the pharma front, which sparks hope that small caps are undervalued overall.  

Small Cap Gainers:

• RXi Pharmaceuticals Corp. jumped 31% on news that the firm will enter a research collaboration with the University of Massachusetts Medical School. See (Nasdaq:RXII).  
• WellCare Health Plans Inc. rallied about 19% as the firm updated its 2008 forecast and said it would pay in fall outstanding term loan balances. See (NYSE:WCG).
• StealthGas climbs 15% in pre-market after announcing a rise in Q3 profit; declaring dividend. See (Nasdaq:GASS).
• Homebuilder stocks were going well today, with the ISE Homebuilders Index up 4.6%, with small-cap builder Lennar Corp. rising 11%. See (NYSE:LEN). 

Small Cap Losers:

• Wyeth withdraws from Crucell takeover talks; Crucell tumbles 15% in pre-market. See (Nasdaq:CRXL).
• AMN Healthcare Services Inc. was down 13% sinking to 52-week lows. See (NYSE:AHS).  

Small-cap stocks pushed higher after a flat open, underpinned by bullish enthusiasm stoked by news that Pfizer Inc. (NYSE:PFE) would pay $68 billion for Wyeth (NYSE:WYE) in one of the biggest pharma M&A deals in years. In addition, economic data on home sales and leading indicators topped expectations, fueling the rise in equities. Some of today's small-cap gainers were RXi Pharmaceuticals Corp. (Nasdaq:RXII), WellCare Health Plans Inc. (NYSE:WCG) and StealthGas (Nasdaq:GASS).
  
Other Market Watch highlights today included:

• Crude prices pushed about $1 a barrel higher, which should underpin energy shares if the firm tone persists.  
• Even though much of the early news today seemed soft (outside of the econ data), the market was holding together reasonably well.  
• Leading indicators came in at +0.3%, better than the projection for -0.3%. This marked the first rise in leading indicators since June 2008.
• Existing home sales came in at an annual rate of 4.74M units, above the forecast of 4.4M. Sales were up 6.5%, compared with a slide of 9.4% in Nov.

Small Cap Gainers:

• RXi Pharmaceuticals Corp. jumped 31% on news that the firm will enter a research collaboration with the University of Massachusetts Medical School. See (Nasdaq:RXII).  
• WellCare Health Plans Inc. rallied about 19% as the firm updated its 2008 forecast and said it would pay in fall outstanding term loan balances. See (NYSE:WCG).
• StealthGas climbs 15% in pre-market after announcing a rise in Q3 profit; declaring dividend. See (Nasdaq:GASS).
• AngioDynamics Inc. was up 12%, gapping higher and pushing toward multi-month highs. See (Nasdaq:ANGO).  

Small Cap Losers:

• Wyeth withdraws from Crucell takeover talks; Crucell tumbles 15% in pre-market. See (Nasdaq:CRXL).
• AMN Healthcare Services Inc. was down 13% sinking to 52-week lows. See (NYSE:AHS).  

Small-cap stocks are expected to open higher, underpinned by surprisingly stout employment figures on this morning’s ADP Employment Report. The Russell 2000 (NYSE:IWM) was up about 0.3% in after-hours trading, which suggests an open near 716.50.

The ADP headline figure for non-farm payrolls came in at plus 9,000 jobs, which was a big surprise over the projection for a decline of 58,000 jobs. The immediate market response to the ADP report was a rally in the U.S. dollar, a decline in Treasury futures and a four-handle upside pop in S&P 500 futures. Although the ADP report has been less accurate in forecasting the Labor Department’s monthly employment release over the last year, the move into a positive number should provide a little more optimism about the employment picture heading into Friday’s big report.

Also on the data front, the MBA Mortgage Applications Survey came out this morning and was down 14.1 to the lowest level since December 2001. The combination of weak home sales and slumping home equity continue to take a toll on mortgage applications.

Crude oil futures were hovering near $122 dollars a barrel this morning, down just a tad from Tuesday’s close and basically marking time ahead of the weekly inventory report later this morning, which is expected to show a 200,000-barrel . . .

Small caps are taking a beating in Friday’s mid-session trading, as crude oil prices surged and credit jitters prompted a broad sell-off in the financial sector. At 12:04 p.m. ET, the Russell 2000 (NYSE:IWM) was down 10.85, or 1.47%, at 726.98.

Small-cap investors tried to rally in the third hour of trading but met resistance at the 730 notch. After the brief resurgence, the small-cap slide is continuing into the afternoon session.

Merrill Lynch (NYSE:MER) started off the selling frenzy after cutting its estimates for regional banks. Rival investment banks Goldman Sachs (NYSE:GS) and JP Morgan (NYSE:JPM) were both in the red in midday trading as well. MER is down 3.9%, GS has fallen about 1% and JPM is off 0.4%.

Crude oil futures have rebounded from the largest one-day decline in about three months. In recent trading, crude has climbed $3.29 to $135.22 a barrel. The rebound in crude prices was accompanied by a falling U.S. dollar, which is down against both the euro and the yen.

Broad market sectors attracting sellers today were airlines, computer storage devices, plastics and rubber, casinos, auto and truck manufacturers, audio and video equipment and computer peripherals. Sectors on the upside included school services, savings and loans banks, gold and silver and oil well services and equipment companies.

Small-cap stocks took a dive on the opening, pulled under water by yet another selling flurry in the financial sector, a recovery bounce in crude oil, declines overnight on international equities and safe-haven flow out of stocks into bonds. At 10:10 a.m. ET, the Russell 2000 (NYSE:IWM) was down 12.96, or 1.76%, at 724.87.

This morning’s whipping post for the financials was Merrill Lynch (NYSE:MER) and shares in the investment banking firm were down 5.2% shortly after the opening. The market seems to be rotating around various financial stocks, but the whole group is also being punished as investors shy away from the group amid the ongoing credit crunch. Rival investment banks Goldman Sachs (NYSE:GS) and JP Morgan (NYSE:JPM) were both in the red early today as well. Ironically, even as Merrill is a target for the bears this morning, their own analysts issued bearish news on several banks, forecasting dividend cuts and lowering price targets. Wachovia (NYSE:WB) was off 5% and Bank of America (NYSE:BAC) was down 4%.

During Thursday’s session, crude oil futures offered an olive branch to stock market bulls via the largest one-day slide in about three months, but the market for black gold rallied back some overnight, climbing above $136 dollars a barrel heading toward the U.S. stock market opening. There was some talk once again about Israel planning a strike against Iran’s nuclear facilities; those rumors were in the news back on June 6 when crude oil jumped.

The stiff bounce in crude oil was accompanied by a sinking U.S. dollar, which lost 0.7% against the euro and about 0.5% versus the yen. The sinking dollar also could support a wide range of other commodity markets heading into the weekend.

Stock markets around the world were on the defensive overnight, with Japan down 1.3%, Taiwan off 1.8%, Australia down 1.4%, India down 3.4%, Hong Kong down 0.2%, South Korea down 0.6%. China shares did bounce 2.7%, but that . . .

French biopharmaceutical company Flamel Technologies (Nasdaq: FLML) reported this morning that it has entered into a development and license agreement with Wyeth Pharmaceuticals (NYSE: WYE) for the development and licensing of a marketed protein using Flamel’s Medusa technology.

Flamel said it will receive an upfront payment and potential development fees, milestones and royalty payments, the terms of which are not disclosed.

“This agreement concerns our new uniform polymer which is applicable to a wide variety of proteins and peptides,” Flamel’s CEO Stephen Willard said. “This new relationship contributes to our goal of building a diverse set of relationships for our Medusa platform, which we expect will continue to grow.”

Shares of Flamel gained $0.68, or $7.44, to $9.82 in morning trading Wednesday.

Shares of Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY) are rising following news this morning that the Cambridge, Mass.-based company has entered into an alliance with Roche Holding Ltd., according to which Roche obtains a non-exclusive license to Alnylam’s technology platform for developing RNAi therapeutics. Alnylam will receive $331 million upfront. The agreement could be worth more than $1 billion when factoring in future milestone payments. RNAi is a natural mechanism that the body uses to inhibit expression of certain genes. Shares are up $9.19, or 60%, to $24.39.

Shares of Novavax Inc. (Nasdaq: NVAX) are rising following news this morning that the Rockville, Md.-based pharmaceutical company has signed a non-exclusive, worldwide license agreement with industry giant Wyeth (NYSE: WYE) to obtain rights to a patent application covering virus-like particle technology for use in human vaccines in certain fields of use. The stock is up $0.02, or 1%, to $3.07.

Ariad Pharmaceuticals Inc. (Nasdaq: ARIA) announced Friday it has filed a counter-claim against Amgen Inc. (Nasdaq: AMGN) and Wyeth (NYSE: WYE) in a patent infringement suit.

In April 2006, Amgen filed a lawsuit against Cambridge, Mass.-based Ariad, which develops drugs to treat cancer. Amgen’s goal was to nullify a patent of Ariad’s in order to protect its Enbrel arthritis drug.

Later in the year, Ariad unsuccessfully sought to have the lawsuit dismissed.

Ariad Chairman and CEO Dr. Harvey Berger said his firm’s counter-claim illustrates Ariad’s “strong belief in the validity and enforceability of” its patent.

Shares of Ariad Pharmaceuticals Inc. (Nasdaq: ARIA) were up $0.08, or by 1.8%, to $4.52 in after-hours trading Friday after the company announced it has filed a counter-claim against Amgen Inc. (Nasdaq: AMGN) and Wyeth (NYSE: WYE) in a patent infringement suit. In April 2006, Amgen filed a lawsuit against Cambridge, Mass.-based Ariad, which develops drugs to treat cancer. Amgen’s goal was to nullify a patent of Ariad’s in order to protect its Enbrel arthritis drug. Later in the year, Ariad unsuccessfully sought to have the lawsuit dismissed. Steep legal fees associated with the lawsuit contributed to Ariad posting a nearly $62 million loss during the fiscal year ending Dec. 31, compared with a $55.5 million loss in fiscal 2005. Ariad Chairman and CEO Dr. Harvey Berger says the suit illustrates the firm’s “strong belief in the validity and enforceability of” its patent.