Today we have quite a few biotechs covered, and this is simply because we must follow where the money is going and currently biotechs are rewarding investors. Markets shook off the European news for the most part yesterday, and even rallied off of the consumer credit data released by the Federal Reserve because the number was over 2x higher than anticipated…and we thought the number would be insignificant (as we stated in yesterday's article!). That number surprised everyone, and we will have to see where that money was spent (retail, gas or vacations) from other economic news moving forward.
As we said yesterday today will be a no news economic day. There are not many of them throughout the year here in the US, so the newsflow will be highly susceptible to rumors and anything else coming off of the Wall Street trading desks.
Looking at Asian markets we see markets are higher:
All Ordinaries - up 0.33%
Shanghai Composite - down 0.12%
Nikkei 225 - up 0.69%
NZSE 50 - up 0.34%
Seoul Composite - up 0.54%
In Europe markets are higher:
CAC 40 - down 1.81%
DAX - down 1.22%
FTSE 100 - down 0.36%
OSE - down 0.28%
Apple (AAPL) traded up $4.23 (0.75%) to close at $569.48 on volume of 16 million. The action in Apple helped push the indices higher during the day, but it did appear that shares stalled. We are now convinced that Apple must move higher now for the general market to move higher. It was a general during the last bull move higher, and it will be necessary for it to lead another rally - at least in the early stages. Some might disagree with this, but the fact of the matter is that investors now look to Apple for leadership and guidance because it has become a bellwether.
Clearwire (CLWR) traded 21 million shares yesterday with the stock falling $0.21 (13.82%) to close at $1.31/share. The company did announce a $300 million offering, and it is no secret that the company has cash issues so one has to believe that this is to help build out the network further and keep from losing spectrum. Looking at suppliers, it appears the buildout of the network is slowing, which is just our observation, but if correct, and we think we are, then this is definitely not good news.
Vertex Pharmaceuticals (VRTX) rose $20.71 (55.36%) to close at $58.12/share. The company traded 40 million shares on the news that a Cystic Fibrosis drug combo shows promise in many more patients than anticipated. There were a few analysts who raised their price targets on Vertex, which added fuel to the fire, and some analysts estimated that peak revenue could reach as high as $3-4 billion for this drug. The company also has a robust pipeline with 5 drugs in Phase 2 and 3 drugs in Phase 1 studies right now. This will be one to watch moving forward.
Arena Pharmaceuticals (ARNA) rose $0.13 (5.02%) to close at $2.72 on volume of almost 14 million. It looks like the slow creep up has begun and investors are positioning for Thursday. Unless one has a strong conviction one way or another for how the FDA will weigh in, we would stay away because the computers are going to whip this stock around come Thursday. We would suggest being very careful with this one simply because we've seen it all with this one.
BioCryst Pharmaceuticals (BCRX) had volume 25% higher than normal, but still well under 1 million. Share rose $0.31 (9.20%) and finished at $3.68/share as they reported results. Revenue was up, but the company also had good news on the pipeline, most notably the gout drug. Investors should also watch the Hepatitis C drug moving forward.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.