The week started out on a good note, after Federal Reserve Chairman Ben Bernanke cheered the market with his assurance that the Fed will continue to pump easy money into the U.S. economy. The optimism waned quickly, though, and the major U.S. indexes spent the next three days giving back some of Monday's gains. Why? Perhaps investors realized that Bernanke's assurance that the weak economy necessitated accommodative monetary policy underscored the fact that, well, we have a weak economy.
By the time the dust had settled on Friday, the Dow Jones Industrial Average (INDEX: ^DJI ) had tacked on 1%, while the broader Russell 3000 rose 0.7%. Though stocks broadly ticked up just a bit, there were plenty of individual stocks that finished the week with screaming gains.
The week's big winners
Arena Pharmaceuticals (Nasdaq: ARNA ) had a big week last week, and it just kept right on going this week. This time around, however, there was some actual news for investors to get excited about. On Monday, the company said the European Medicines Agency had accepted the filing of Arena's application to market its weight-loss drug lorcaserin in Europe. Arena also said the U.S. Food and Drug Administration confirmed that an advisory panel would review lorcaserin on May 10. As my fellow Fool Brian Orelli noted, many pharma companies have had an easier time gaining approval in Europe; however, he's not quite sure that that fact justifies the stock's massive run this week.
Arena wasn't the only drugmaker soaring this wee,k though. Diabetes-drug specialist Amylin Pharmaceuticals (Nasdaq: AMLN ) watched its stock shoot sky high after reports that the company had rejected a $3.5 billion buyout offer from pharma giant Bristol-Myers Squibb. Why would shares be flying on a buyout-offer rejection? Because investors are obviously drooling over the potential for an even larger buyout offer to come in. How much higher isn't quite clear, but the current price of nearly $25 a share is well above Bristol's rumored buyout offer -- which works out to $22. As far as next steps for investors, I'm with my fellow Fool Brian Pacampara, who advised treading carefully.
Top 3 Performing Russell 3000 Companies
|
Company
|
Weekly Price Change
|
| Amylin Pharmaceuticals |
59.8% |
| Arena Pharmaceuticals |
26.1% |
| Pentair |
21.3% |
Source: S&P Capital IQ. Weekly price change is March 23-March 30. Includes only companies with a market cap of $250 million or higher.
Joining in on the big gains during the week were Molycorp (NYSE: MCP ) and Teekay Tankers (NYSE: TNK ) .
The rare-earth mining industry is steaming ahead. Or at least that's the conclusion that investors drew from the earnings report from Chinese miner Inner Mongolia Baotou Steel Rare Earth Hi Tech. The company's earnings soared 363% on revenue growth of 119%, as China's appetite for rare-earth metals continues. The strong report from Inner Mongolia Baotou drove investor excitement for other rare-earth miners, such as Molycorp. However, all may not be lollipops and unicorns -- as my fellow Fool Sean Williams pointed out, Inner Mongolia Baotau noted that prices for rare earths continue to fall and could hit earnings for the back half of the year.
For Teekay, the week's boost came largely on the back of an upgrade from Wall Street research firm Dahlman Rose. Dahlman highlighted the recovery in oil prices and suggested that a sustained recovery would be good news for Teekay and fellow tanker operators such as Frontline. It raised both Teekay and Frontline's stock ratings to buy.
By week's end, Molycorp had tacked on 15% while Teekay was up 13%.
That's it for this week's top-performers recap. If you're looking for some ideas for strong outperformers for the rest of year, The Motley Fool has created a brand new free report titled "The Motley Fool's Top Stock for 2012." In it, my fellow Fools reveal a top pick that's poised for explosive growth ahead. Get instant access -- it's free.
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