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There might be economic gloom on the horizon enough to send the Dow Jones Industrial Average tumbling 111 points, but Merck (NYSE: MRK  ) bucked that trend and jumped 1% yesterday -- making it the index's biggest winner --  after its insomnia drug suvorexant got favorable reviews in clinical studies.

The Dow's decline was fairly broad-based, though, with three quarters of the stocks listed on major exchanges falling lower, but there were some stocks that did even better than the pharmaceutical giant, surging by double-digit percentages. You should still resist the urge to high-five everyone in the cubicles next to you however. Smart investors won't celebrate until they know why their stock surged, because without a fundamental basis for the bounce, these stocks could just as quickly make the return trip down.

Going in reverse
With a presentation scheduled before the American Association for Cancer Research over the next few days where Astex Pharmaceuticals  (UNKNOWN: ASTX.DL  )  anticipates being able to show significant data supporting its clinical programs, Wall Street thinks the company will enjoy substantial price appreciation. Analysts at RBC Capital set a price target for the novel small molecule therapeutics biotech that was nearly 80% higher than its closing price the other day.

Even with the 10% jump in Astex's stock yesterday, there's still some 60% more value to be had in a drugmaker that the Fool's Sean Williams has been touting as one of the best risk-versus-reward biotech companies.

With shares tripling over the past year and up more than 90% in 2013, investors still need to be aware of possible speed bumps before it goes parabolic. Royalties from Dacogen, which is marketed in North America by Japanese pharma Eisai and in the rest of the world by Johnson & Johnson (NYSE: JNJ  ) , could start dropping once its orphan drug status expires next month. With the myelodysplastic syndrome treatment accounting for virtually all of its revenues, the likelihood of generic competition grows.

But generics haven't appeared yet and J&J got the drug approved in Europe to treat acute myeloid leukemia last fall, so the expanded indications could make up for any potential shortcomings if it gains traction. There could very well be more upside present in this biotech to warrant the attention of analysts and Fools.

Squirreling away for winter
Analyst upgrades were also part of the explanation for Niska Gas Storage Partners (UNKNOWN: NKA.DL  ) surging almost 15% yesterday as Goldman Sachs and Stifel Nicolaus improved their outlook for the the largest independent owner and operator of natural gas storage in North America. Yet where Goldman eased into the position going from a sell to neutral, Stifel jumped in with both feet and went right to a "buy" recommendation. Coupled with a restructuring the company just completed, things are looking better for the storage specialist even in the face of a persistent inventory glut.

Exactly a year ago I said Niska would stand to benefit from drillers that continued to pump out more natural gas, and now with a winter that seemingly won't end, cold weather is causing natural gas prices to rise -- they're at levels not seen since 2011 -- and there's even more production in the field. Yet with the cold snap inventories have fallen enough where they're now almost in equilibrium with their five-year historical averages.

Niska has gained more than 70% since I marked it to outperform the broad indexes on Motley Fool CAPS, attaining half of that appreciation this year alone. As a toll collector on the natural gas superhighway, I'm more inclined to side with the Stifel analysts in suggesting Niska Gas Storage Partners is a buy because the industry may finally be ready for a rebound.

A closer look at Merck
This titan of the pharmaceutical industry stumbled into 2013 and continues to battle patent expirations and pipeline problems. Is Merck still a solid dividend play, or should investors be looking elsewhere? In a new premium research report on Merck, The Fool tackles all of the company's moving parts, its major market opportunities, and reasons to both buy and sell. To find out more click here to claim your copy today.

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12/31/1969 7:00 PM
ASTX.DL $0.00 Down +0.00 +0.00%
Astex Pharmaceutic… CAPS Rating: ***
MRK $63.38 Up +0.81 +1.29%
Merck and Co. CAPS Rating: ****
NKA.DL $0.00 Down +0.00 +0.00%
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JNJ $119.47 Up +0.25 +0.21%
Johnson and Johnso… CAPS Rating: *****