Why Chiquita Brands, McClatchy, and Intercept Pharmaceuticals Jumped Today

The market originally had the Monday blues, but broad-market indexes regained almost all of their losses by the end of the day. Find out more about why these three stocks soared.

Mar 10, 2014 at 8:00PM

On Monday, investors originally went into a near-panic following the release of troubling economic data from China indicating an unexpected plunge in exports. Yet over the course of the day, the market clawed back all but a small fraction of its losses, with the S&P 500 closing down just 0.05% on the day. The best performing stocks in the market included Chiquita Brands International (NYSE:CQB), McClatchy (NYSE:MNI), and Intercept Pharmaceuticals (NASDAQ:ICPT), which climbed for a variety of different reasons today.

Chiquita Brands jumped 11% after the banana giant agreed to merge with Irish produce giant Fyffes to create what will become the largest banana producer in the world. If approved, the merger of near-equals will leave current Chiquita shareholders owning just under 51% of the combined ChiquitaFyffes, and the companies expect to save $40 million per year from the combination. The deal will be bad news for privately held Dole Food, which would lose its No. 1 status in the banana market if the merger goes through, but given that Fyffes shares soared 42% on the London Stock Exchange, it's clear that shareholders of both companies are pleased with the deal. The transaction also effectively transfers Charlotte-based Chiquita's domicile to Ireland, with attendant benefits that have led many other U.S. companies to go across the Atlantic.

McClatchy rose 14% on reports that it and other companies that co-own the Cars.com website are looking to sell the e-commerce site, hoping to get $3 billion for the business. Gannett (NYSE:GCI) and several other newspaper companies own Cars.com through a joint venture, and Gannett rose 2% today. But McClatchy has a much smaller market capitalization than Gannett, and so a prospective deal -- and the money that would come from it -- would make a much bigger difference to its shareholders.

Intercept gained 8%. Despite a lack of specific news affecting the promising biotech, investors continue to watch closely for signs of the potential of Intercept's obeticholic-acid therapy for primary biliary cirrhosis and non-alcoholic steatohepatitis. With analysts suggesting annual sales of $3 billion are possible even if a successful drug only gets used in a limited subset of NASH cases, Intercept has plenty of potential. But nervous investors have also pointed to the huge rise in biotech stocks more generally as being a troubling sign of what could prove to be a short-lived trip to the stock market stratosphere if things don't go perfectly for Intercept.

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Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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