Europe Stops Hammering the Dow

A lack of global chaos is making for a nice up day in the markets, although no one should expect it to last. Spain may have successfully kicked the can down the road for a little while, as the country's borrowing costs have eased slightly, but the underlying issues in that country remain. Not to mention that Greece is still a ticking time bomb with the clock approaching zero. Disaster can still be averted, but it will take a dramatic change in tone and action from global policymakers to date.

That said, let's take a closer look at where the three major indexes are and at several stocks making headlines.

Source: Yahoo! Finance.

After a slight uptick yesterday, the VIX (INDEX: ^VIX) has resumed its negative trend from last week. It isn't uncommon for the "fear index" to weaken when there aren't larger events driving volatility. All three indexes are solidly in positive territory, with the Dow's 1% gain leading the way. Only four components have losses on the day, with financial stocks among the worst losers, and only one, United Technologies, has more than a 0.1% decline after announcing it will need to raise $1 billion to complete its acquisition of Goodrich.

A pair of energy sources that some would argue represent the past and future of the industry are both making headlines. Coal has had a rough go of it lately; Patriot Coal (NYSE: PCX), which is down 2% today, has seen over 90% of its value wiped out over the last year, and the sector's ETF is hovering near 52-week lows.

Cheap natural gas with its lower emissions has spurred the switch from utilities. Just four years ago, coal was responsible for half of this nation's electricity generation; in 2012 that share will decline to an estimated 37%. Natural gas will see a 50% increase from 20% to 30%, and renewables like wind and solar will double... but to a still-small 4%. First Solar (Nasdaq: FSLR), however, is up 15% on news that a European plant will stay open to fulfill unexpected short-term demand. Unfortunately, this is likely residual demand and lower subsidies in the region will eventually cause that plant to close. Similar to Patriot Coal, First Solar has seen a 90% drop over the past year, but while the economics of the business are currently difficult, the industry has a long-term potential exceeding that of coal. The question is whether the small players around today will be the ones to capitalize on it.

Finally, Arena Pharmaceuticals (Nasdaq: ARNA) is seeing another strong 8.7% gain, adding to its double this month and five-bagger results of the past year. The obesity-drug maker is waiting for FDA approval of its weight-loss drug lorcaserin after receiving a positive 18-4 advisory panel recommendation. While there is no news driving the stock today, investors are still piling in before the FDA decision, but I should caution that the agency has been tough on obesity drugs in the past and only risk-tolerant investors should consider investing here. The FDA has been known to overrule its advisory committees.

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