Stocks snatched back nearly all the losses they endured on Friday by posting broad gains on Monday. The Dow Jones Industrial Average (^DJI 0.67%) and the S&P 500 (^GSPC 0.87%) indexes both ended near session highs and rose by more than a full percentage point.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
1.3% |
240 |
|
S&P 500 |
1.5% |
31 |
Data source: Yahoo! Finance.
Investors reacted to information suggesting the Federal Reserve may delay hiking interest rates at its monetary policy meeting later this month. Fed official Lael Brainard said in a speech on Monday that low inflation suggests the central bank has room to wait until "further gains in the labor market" before tightening its policy for just the second time in a decade.
As for individual stocks, Caesarstone (CSTE 7.91%) and Gern (GERN 1.08%) each made large moves on Monday behind unusually heavy trading volume.
Caesarstone's new investor
Quartz surface specialist Caesarstone jumped 14% on news that the company has attracted a major new investor. Tene Investment Funds agreed to purchase 1 million of its shares, Bloomberg reported over the weekend, at a price of roughly $43.50 apiece. The deal will give Tene control of 3% of Caesarstone's outstanding shares and two seats on the board of directors. The fund also has the option to triple its ownership over the next five years.
Image source: Caesarstone.
Caesarstone's stock has been flat over the last 12 months as sales growth in the key U.S. market slowed to a crawl. There were signs of a building turnaround last quarter, though, when revenue expanded at a 5% pace compared to 3% in the prior quarter. Yes, that's far worse than the 20% pop that Caesarstone managed in fiscal 2015, but it's still a step in the right direction. CEO Yosef Shiran told investors in August that the company is aiming for further improvements in its U.S. business this year on the way toward 12% overall sales gains. Besides lifting shares up toward its $43.50 valuation, the Tene investment deal could also add some urgency to executives' rebound plan since it brings an outside voice into the company's strategic discussions.
Geron's imetelstat update
Geron's stock plunged 20% after the biotech company announced news on key clinical stage trials regarding its imetelstat treatment. One of the studies had been testing for the treatment of blood cancer myelofibrosis at two dosage levels and found that the lower dosage was ineffective. "Activity in the [low] dosing arm does not warrant further investigation of that dose and this arm will be closed to new patient enrollment," the company explained in a press release. As a result, only the higher-dosing option has a chance at advancing through clinical trials.
Image source: Getty Images.
That raises the risk profile for this stock since Geron has fewer opportunities to get its imetelstat product into a range of commercialized treatments. Monday's news also points to delays in that process since Geron's partner, Janssen, may need more time than originally thought to evaluate the drug. Given that the partnership between the two companies is potentially worth as much as $900 million to Geron (for the achievement of different clinical and regulatory milestones as well as royalties should the treatment make it to market), any setback or delay is likely to drive investors to punish the stock as they did today.
