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.
With the Martin Luther King Jr. holiday shortening the trading week and a very light amount of economic data on tap, the S&P 500 (SNPINDEX: ^GSPC ) had a hard time finding traction and deciphering which way it wanted to move today.
Early fourth-quarter earnings results were the primary driver of the S&P 500, and were ultimately responsible for pushing it modestly higher.
On one hand Delta Air Lines delighted shareholders by reporting a 6% jump in revenue that was helped by a 9.4% increase in domestic revenue. The airline's profit increased as fuel costs decreased by $91 million.
Then again, health care conglomerate Johnson & Johnson (NYSE: JNJ ) reported market-topping fourth-quarter results that included a 4.5% increase in revenue and a $0.04 EPS beat, but offered a fiscal 2014 earnings-per-share forecast of $5.75 to $5.85, at the low-end of Wall Street's forecast.
By day's end, the S&P had digested these and other earnings stories and moved higher by 5.10 points (0.28%) to close at 1,843.80, ending a two-day losing streak.
Shares of VoIP and Ethernet telecommunications service provider Inteliquent (NASDAQ: IQNT ) led the charge, advancing 22.9% after receiving an upgrade to outperform from market perform from research firm Raymond James. This followed the appointment of Kurt Abkemeier as the company's new chief financial officer. While the appointment of a new CFO clears some near-term uncertainties at Inteliquent, the upgrade with a fresh $12 price target appears to be most responsible for today's share price jump. With close to $2 in cash per share and the company valued at just 16 times forward earnings, I would certainly say that Inteliquent could have more left in the tank.
Marching to the beat of its own drum for a second straight session was Pacific Biosciences of California (NASDAQ: PACB ) , which rallied 19.5% despite a lack of specific news on the genetic analysis company. The entire genetic analysis sector has been abuzz since the JPMorgan Healthcare Conference last week in which Illumina unveiled a new genome sequencer, the HiSeq X Ten, that is capable of sequencing 18,000 or more human genomes annually at a cost of $1,000 per genome. The opinion from analysts is that as sequencing technologies become more affordable, their use in personalizing cancer treatments is going to explode higher. That would be music to the ears of Pacific Biosciences shareholders who have seen their company improve revenue by low double-digits in recent quarters.
Finally, clinical-stage drug developer Galectin Therapeutics (NASDAQ: GALT ) jumped 15% after announcing a preclinical study that supports its investigational new drug application for GR-MD-02 in nonalcoholic steatohepatitis, or NASH. Specifically, hyaluronic acid, a biomarker of liver fibrosis, which is common with NASH, was reduced by 33% in animals treated with GR-MD-02 compared to untreated animals. As we've witnessed with Intercept Pharmaceuticals' recent $200-per-share move following its midstage results on obeticholic acid, there's a huge market for treating advanced NASH cases (approximately 6 million people), so these early results could be encouraging. Keep in mind, though, that how a drug responds in animal testing can be completely different from how it responds in human clinical trials. Don't get too excited just yet.
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