Investors were treated to new stock market highs ahead of the unofficial start of the second-quarter earnings season on Monday. The Dow Jones Industrial Average (DJINDICES:^DJI) gained 77 points in the trading session, or 0.4%, to push its return to nearly 5% so far this year. The S&P 500 (SNPINDEX:^SPX) added 7 points, or 0.3%, to pass the record high it last set a year ago.
A few stocks managed to stand out with even bigger gains on Monday. In fact, Nintendo (OTC:NTDOY) and Sagent Pharmaceutical (NASDAQ: SGNT) each rose by over 30% following major news for shareholders.
Nintendo's mobile win
Nintendo soared by over 30% following the runaway success of its first entry into mobile gaming. Pokemon Go, a scavenger hunting game, rocketed to the top of app store sales charts over the weekend. In just a few days, the title has generated some incredible smartphone usage statistics, including installation on over 5% of Android devices in the U.S. Pokemon Go also accumulated nearly as many active daily users as Twitter, according to web analytics provider SimilarWeb, which logged users as spending an average of 43 minutes in the game per day.
The title includes in-app purchase but is free to download, so it won't do much to goose Nintendo's bottom line. However, investors are excited about the prospects of the company extending its reach into the smartphone market, with its hundreds of millions of devices.
By contrast, the Wii U's installed base sits less than 13 million units, compared with over 100 million for its predecessor, the Wii. If Nintendo chooses to release more of its blockbuster franchises into the mobile gaming world, this week's release numbers suggests they'll see strong demand.
Nintendo is set to release quarterly results on July 27, when investors should get updates on its mobile strategy and how it fits in with the new console gaming hardware it plans to release next year.
Sagent Pharmaceuticals' merger
Injectable drug specialist Sagent Pharmaceuticals gained 40% after agreeing to be bought out by Japanese drug giant Nichi-Iko in an all-cash deal valuing the company at $740 million. Yet even with that surge, Sagent's stock is down 16% over the last year.
Nichi-Iko is using the move to accelerate its international growth, especially by boosting its access to the U.S. market. The company hopes to one day become a top global provider of generic drugs, and it gets closer to that goal by acquiring Sagent's sales structure, its customer relationships, and its portfolio of 55 popular products across the oncology, anti-infective, and critical care segments of the industry.
Sagent executives, meanwhile, believe the merger makes good business sense even though the company enjoyed a higher market capitalization as recently as last August. "We are confident that Nichi-Iko is the ideal partner to help us push forward into our next stage of growth," CEO Allan Oberman said in a press release. Investors don't appear to be holding out for competing bids since the stock closed at just below the transaction price of $21.75 per share. Shareholders can look for the deal to close sometime in the next six months, the companies said.