Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Traditionally, the week of Christmas tends to be slow as many investors celebrate the holidays. Even with big gains already locked in for 2013, the stock market nevertheless continued to rise Monday, with strong economic news and the major announcement of iPhone availability for users of China's leading mobile network helping to boost sentiment. Ambac Financial Group (NASDAQ: AMBC ) , Ariad Pharmaceuticals (NASDAQ: ARIA ) , and YRC Worldwide (NASDAQ: YRCW ) all posted much more extensive gains than the overall market.
Ambac climbed 12% after a favorable review of the bond-insurance provider in Barron's over the weekend. The article argued that Ambac has done a good job of restructuring itself after going through bankruptcy, and the post-bankruptcy shares -- not to be confused with old shares that were almost worthless -- could easily jump 50% within the next 12 months and even more in the long run. Given the performance of other mortgage and bond insurers recently, that assessment seems consistent with the general perception of the industry. Admittedly, plenty of risks still exist in the market, but with peers having won cases against mortgage lenders over insurance claims, Ambac could see further gains even after today's jump.
Ariad Pharmaceuticals gained 9% as the beleaguered biotech got an upgrade from an analyst who argued that higher sales of its Iclusig treatment for leukemia could help return the stock to higher levels. The move adds onto Friday's jump of more than 16% that came when Ariad said that the FDA would allow it to start selling Iclusig again after a suspension of sales back in October. Investors still need to be prepared for more restricted indications for Iclusig sales than they saw previously, but if the company can work its way through its issues, then Ariad could have further to rebound from its huge drop during the autumn.
YRC Worldwide soared 22% as the trucking company came to a deal to reduce its debt by $300 million. With the company struggling to get favorable concessions in union-contract negotiations, the benefit of low interest rates has helped YRC restructure its debt. Today's deal will involve creditors buying shares at $15, roughly where shares started the day, and could make a union agreement more likely. YRC Worldwide is fortunate to have found a possible escape to its overreaching expansion and overspending in past years, but today's move could help it start going in the right direction.
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