Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
As we head into the weekend, the only story with any merit today was Federal Reserve chairperson nominee Janet Yellen being confirmed by the Senate Banking Committee by a vote of 14-8. The next step in the process is to have the entire Senate vote on her confirmation, although no one is exactly sure when this vote is scheduled to take place.
Yellen's confirmation is important because it removes uncertainty -- something that investors and the broad-based S&P 500 (SNPINDEX: ^GSPC ) don't like. Yellen offers a middle-of-the-road approach and has few ties to business interests so many on Wall Street view her as a potentially growth-friendly nominee who will push forward record-low interest rates and general monetary easing as needed for some time to come.
Coupling this vote with a light week of generally above-average earnings reports, the S&P 500 finished the day higher by 8.91 points (0.50%) to close at 1,804.76, another all-time record high and its first close above the 1,800 mark.
Topping the charts today was struggling biopharmaceutical company Ariad Pharmaceuticals (NASDAQ: ARIA ) , which added 35.5% after announcing a positive opinion by the European Medicines Agency on the continued use of Iclusig in treatment patients with leukemia. According to the EMA, its recommendations to reduce the potential of occlusive vascular events (i.e., blood clots) includes not giving the drug to patients with a history of heart attack or stroke, assessing patients' cardiovascular health prior to starting treatment, controlling high blood pressure, and monitoring patients throughout the course of the treatment. Many investors expected the EMA to slam the door on Iclusig following its two-year safety study, but this could pave the way in the U.S. for the Food and Drug Administration to follow a similar path and remove its temporary hold on sales.
Cloud analytics company Splunk (NASDAQ: SPLK ) surged 22.8% today after it reported better-than-expected third-quarter results after the bell last night. For the quarter, Splunk reported a 51% increase in sales to $78.6 million on a breakeven bottom line. By comparison, Wall Street expected a loss of $0.01 per share on revenue of just $70.8 million. Looking ahead, the company issued fourth-quarter revenue guidance of $88 million to $90 million, which is nicely ahead of the $85.9 million that Wall Street anticipated. With the cloud buildout still in its infancy and Splunk already turning profitable, there's still room for plenty of growth; however, at more than 300 times 2016's earnings estimates, that growth may well be baked into its share price already.
Finally, small-cap clinical-stage biopharmaceutical company Galena Biopharma (NASDAQ: GALE ) continued its recent surge, up 14.6% despite a lack of company-specific news today. This hasn't, however, been a news-less rally as the stock has been rocketing higher since Galena released positive early-stage results last week for its folate binding protein vaccine for the prevention of cancer recurrence in patients with ovarian and endometrial cancer. The early-stage trial demonstrated immunological response in high-risk gynecological cancers and appeared well-tolerated. The big driver for Galena, though, remains HER2-targeted breast cancer vaccine NeuVax. Although the drug has been impressive in trials thus far, historically the deck is well stacked against small-cap biotechs when it comes to getting cancer drugs and vaccines approved, and shareholders will be waiting quite a while to get an answer on its late-stage effectiveness.
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