Veni, vidi, vici S&P 500 (SNPINDEX: ^GSPC ) ! It came, it saw, and it conquered the 1,900 level for a fresh record closing high heading into the extended holiday weekend.
Helping bolster the index higher was a combination of two factors. First, housing data again helped push the overall market higher. New homes sales data for April showed an increase of 6.4% to a seasonally adjusted annual rate of 433,000. According to data from the Commerce Department, this is the biggest jump in six months, though it shouldn't come as a huge surprise with much of the nation out from under the deep freeze of the polar vortex that started the year. With the weather more moderate across the U.S., and with interest rates still hovering near record-low levels, prospective buyers have been out in full force.
Also helping push the market higher are the lingering rumors and deals from a number of sectors. The potential for a megapharmaceutical merger or General Electric gobbling up Alstom in France has investors rightly excited because increased M&A activity often signals the willingness of businesses to take on risk due to the expectation of a better economic outlook.
By day's end, the S&P 500 had uncorked the champagne, and pushed higher by 8.04 points (0.42%), to close at 1,900.53.
Leading the charge to the upside today is clinical-stage biopharmaceutical company PTC Therapeutics (NASDAQ: PTCT ) , which surged 30.7% after receiving a positive opinion for conditional marketing approval in Europe for translarna (the branded name given to ataluren) from the Committee for Medicinal Products for Human Use (CHMP).
As PTC's lead investigational compound, it's aimed at treating nonsense mutation Duchenne muscular dystrophy, and would be the first therapy ever approved specifically for that indication. The European Medicines Agency will meet in about three months to decide whether to approve it throughout the EU. While the data from its phase 2b study was incredibly positive, with a 31.3 meter benefit in the six-minute-walk-distance (6MWD) compared to the placebo at week 48, and remarkably better in patients who had less ability to walk 350 meters in the first place, I'd continue to keep a little bit of skepticism in the back of your mind, as PTC is still running a phase 3 study of translarna. We've already witnessed one DMD-based company fail miserably after succeeding in phase 2 studies.
Sticking within the biotech sector we have Isis Pharmaceuticals (NASDAQ: ISIS ) , which advanced by 11.5%, its second-straight day of double-digit percentage gains, after research firm Piper Jaffray issued positive commentary on the company. According to Barron's, which released commentary from Piper Jaffray's notes, the research firm called Isis "arguably the most attractive and undervalued pipeline in biotech, in our view." Piper Jaffray went on to comment that altering the management team's attitude, or the team itself, or perhaps even being acquired, could change Isis' fortune for the better. Although I feign to pay too much attention to analyst statements, as they're usually short-term share price drivers and rarely have any long-term bearing on our investment thesis, I happen to agree with most of Piper Jaffray's comments. Isis has close to three dozen studies currently in the works, and more than a handful of them have a working collaboration with another biopharmaceutical company. This is a company with numerous chances to hit a home run, and I believe it has the potential to head much higher during the long run.
Lastly, flash-optimized hybrid storage platform provider Nimble Storage (NYSE: NMBL ) vaulted 11% higher after it, too, received positive commentary from Wall Street. Wunderlich Securities analyst Kaushik Roy upgraded the company to buy from hold, and reiterated his $38 price target, implying up to 44% upside in shares as of yesterday's closing price. The upgrade, according to notes from Wunderlich, comes on the heels of what it believes is Nimble's unique systems architecture, which is driving strong sales growth, its strong channel distribution, and its impressive monitoring technology and support system. Wunderlich believes its market share and revenue should grow accordingly based on these assumptions. Though top-line growth has never been an issue for Nimble Storage, I still have my personal concerns about it not seeing any chance of full-year profitability until at least 2017. With a valuation of more than $2 billion already, I'd say the optimism surrounding this story stock is already baked in.
PTC Therapeutics, Isis, and Nimble Storage may have soared today, but all three could struggle to keep pace with this top stock over the long run
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