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The Dow took a shellacking after Fed Chairman Ben Bernanke said he'd continue his half measure known as Operation Twist, a program that artificially keeps interest rates low, but which hurts a large number of financial institutions by encouraging borrowers to refinance at lower rates. It clears the books of banks and mortgage lenders of higher-interest loans, and replaces them with others that have far less favorable terms. And a weak global economy ain't helping things either. The Dow tumbled 250 points, or 2%, yesterday on the news, yet some stocks went on their own joyride, jumping by double-digit percentages in the process.

Resist the urge to high-five everyone in the cubicles next to you, though, because smart investors won't celebrate until they know why their stock surged. Without a fundamental basis for the bounce, these stocks can quickly make the return trip down.

Piggybacking on good news
Although economic concerns drove most of the market news, it was growth catalysts that were sending Onyx Pharmaceuticals (Nasdaq: ONXX  ) higher after its multiple myeloma treatment Kyprolis received a unanimous vote of confidence from an FDA advisory committee. The development sent Onyx's shares surging 43% higher.

Interestingly, Celgene (Nasdaq: CELG  ) plunged yesterday, after it withdrew the application for an expanded indication for multiple myeloma treatment Revlimid for consideration by European regulators. The drug developer chose not to publish the negative decision it expected was coming. The contrasts between the two are stark, but with Revlimid on the market in the U.S., and Kyprolis still needing to be approved, there could still be a role reversal. After all, many analysts were surprised by the vote in Onyx's favor, because there have been significant concerns about side effects impacting the heart, lungs, and liver.

Onyx's treatment is tied to Revlimid, though, because Kyprolis is intended for patients who've previously received Revlimid or Takeda Pharmaceutical's Velcade. As surprising as the vote might be, analysts are now even more confident it will receive approval.

Many investors thought Onyx was overvalued even before the grand leap in its stock price, and CAPS member naughtyguy is left scratching his head over the $4 billion market cap the biotech has been assigned. As much as yesterday's developments bode well for the future, the current valuation looks rich to me. So I've rated it to underperform the market indexes, even though it may very well turn into a long-term winning investment.

Tell me in the comments section below, or on the Onyx Pharmaceuticals CAPS page, whether it's worth these lofty valuations, then add the stock to the Fool's personalized stock-tracking service to be alerted immediately when the FDA makes its decision.

Hail Mary pass?
While Chelsea Therapeutics (Nasdaq: CHTP  ) doesn't have a pending approval, like Onyx, the biotech is working hard to cure the whiplash investors got when an FDA panel recommended its drug Northera receive approval, only to get crushed when the regulatory agency rejected the recommendation. It might be something for Onyx investors to keep in mind.

Yet, the FDA's problems with Northera stem from the trials Chelsea ran that had the bulk of the positive results come from one trial location. The positive results that were released yesterday don’t mean the FDA will fall in line with an approval; it will likely take a new trial to accomplish that. But it reassured investors that the results of the prior trials were strong. And apparently, it did, because shares were bid up 19% on the day.

Chelsea needs Northera to succeed. Executives took 25% pay cuts to fund the trials, eliminated performance bonuses, and transitioned more than a third of its employees to part-time status. It also abandoned its other therapy under development, CH-4051, because the data wasn't encouraging, and it would face stiff competition from Pfizer, Rigel Pharmaceuticals (Nasdaq: RIGL  ) , and Incyte (Nasdaq: INCY  ) .

CAPS member mhonarvarthe2nd doesn't understand the euphoria behind Chelsea, calling it "a drug company with no drug," but the broader investor community is supportive, with 90% of those rating it believing it will outperform the market indexes. However, the low two-star rating they've assigned it suggests that they think there are better places for your money.

Tell me on the Chelsea Therapeutics CAPS page, or in the comments box below, if you think its executives will make back the money they've foregone, then add the stock to your watchlist to be alerted when a new review is scheduled.

Going into orbit
Financial news may move stocks that are big and small, and even Warren Buffett has a stake in some of the largest. If you'd like to know why he keeps his ear to the ground , check out the Fool's free report, "The Stocks Only the Smartest Investors Are Buying," and discover the one banking stock Buffett would buy if he were a smaller investor. Download your free copy today -- but hurry! It's for a limited time only.

Fool contributor Rich Duprey owns shares of Pfizer, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Pfizer. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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