It was another day of generally good economic data, but one bad apple spoiled the bunch for the broad-based S&P 500 (SNPINDEX: ^GSPC ) .
Unsurprisingly, U.S. jobs data continues to point toward an improving long-term outlook. The ADP employment report, released before the opening bell today, showed that 238,000 private-sector jobs were created in December, well ahead of market expectations for about 35,000 fewer jobs to be created. This was also up from the revised November ADP employment figure of 229,000. If these figures continue to top 200,000, there's a good shot that the U.S. unemployment rate can dip below 7%.
The Mortgage Brokers Association also delivered impressive news when it reported that loan origination activity increased 2.6% in the past week. This comes on the heels of loan originations hitting more than a decade low last week. Consumers need to realize that even with rates up roughly 1% from their all-time lows, they are still historically attractive.
That one tidbit that sent the S&P 500 to its fourth loss in five days in 2014 was cautious December commentary from the Federal Open Market Committee, which stated that it wanted to ease back on its monetary stimulus very slowly. Last month, investors took the sign of tapering to mean that the U.S. economy was roaring back on all cylinder. The release today of minutes from the Fed's December meeting merely reinforces that the central bank still views the U.S. economy as a bit fragile.
By day's end, the S&P 500 moved fractionally lower by 0.39 points (-0.02%) to close at 1,837.49.
Topping all stocks today with a gain of 35.6% was neurologic and psychiatric-focused drug developer NuPathe (UNKNOWN: PATH.DL ) . The company jumped following word that Teva Pharmaceutical (NYSE: TEVA ) has offered to pay $150 million, or $3.65 per share, to acquire NuPathe, plus an additional $3.15 per share if certain sales goals for the FDA-approved migraine medication Zecuity are met. Last month, Endo Health Solutions bid $105 million, plus $3.15 per share in milestone incentives, for NuPathe. Although NuPathe's board has yet to determine if Teva's bid is superior, I can pretty much tell you based on investors' reaction today that it is! I find it unlikely that Endo will get into a bidding war with Teva at this point. Adding another FDA-approved drug to its branded drug portfolio for relatively little out-of-pocket cash would be a smart move for Teva.
Sticking with the biotech sector, cancer-focused biopharmaceutical company Galena Biopharma (NASDAQ: GALE ) gained 16.4% after announcing the first enrollment of a patient in its phase 2 clinical trial for immunotherapy GALE-301. Immunotherapy treatments (which retrain the body's immune system to recognize and attack cancer cells) are one of a few highly encouraging new ways to fight cancer, and shareholders are obviously excited about this midstage study kicking off. On the heels of this news, both Maxim Group and Piper Jaffray boosted their price targets on Galena. Still, with few near-term catalysts on the horizon, I'd suggest taking a more cautious wait-and-see approach with Galena.
Finally, Bitauto Holdings (NYSE: BITA ) rallied 14.8% despite a lack of news specific to the Internet-based content and marketing service company for the automotive industry. Nonetheless, it isn't difficult to understand why Bitauto's stock is off to the races given that China's auto market is the fastest growing in the world. With U.S. and Japanese automakers clamoring for a taste of China's growth, Bitauto could be on pace to deliver 30%-plus growth for years to come. Consider it a name worth watching.
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