Stocks advanced steadily through the day, with the Dow Jones Industrial Average (^DJI +0.02%) and S&P 500 (^GSPC +0.84%) both closing at record highs.
Today's stock market
| Index | Percentage Change | Point Change |
|---|---|---|
| Dow | 0.31% | 66.02 |
| S&P 500 | 0.54% | 13.22 |
Data source: Yahoo! Finance.
Energy stocks led the market, as crude oil climbed to over $47 a barrel; the SPDR S&P Oil & Gas Exploration & Production ETF (XOP 0.54%) gained 3.7%. Biotechs also advanced, with the iShares Nasdaq Biotechnology ETF (IBB 0.09%) adding 1.4%.
As for individual stocks, shares of Vertex Pharmaceuticals (VRTX +1.13%) soared after releasing results from clinical studies, and CSX Corporation (CSX +0.83%) fell despite delivering a solid quarter.
Image source: Getty Images.
Vertex soars on cystic fibrosis trials
Positive results from new combination drugs for cystic fibrosis sent Vertex Pharmaceuticals stock 21% higher today. The data was from phase 1 and phase 2 studies of three different triple combination regimens for patients that have a severe and difficult-to-treat form of the disease. The patients showed a significant improvement in an important measure of breathing function, and positive safety data showed that the drugs were well-tolerated.
"These safety and efficacy data are clear and compelling, indicating significant potential benefit for people with CF from each of these three different triple combination regimens," said Jeffrey Chodakewitz, M.D., executive VP and chief medical officer. "We will be collecting and evaluating additional data from these and other studies and will make a decision on which regimen(s) to take forward into pivotal program(s), which we expect to begin in the first half of 2018."
Vertex already has a strong leadership position in drugs for cystic fibrosis. The reason for the excitement over these results is the potential for expanding the number of patients that can be successfully treated. Patients in the study had particular mutations that caused their disease to be unresponsive to existing therapies, and the study data released yesterday were the first to demonstrate the potential to treat the underlying cause of the disease in these patients.
CSX stays on track
Railroad company CSX reported a strong quarter last night that beat expectations, but the stock fell 5% on concerns about the rest of the year. Revenue came in at $2.93 billion, up 8% from the year before. GAAP earnings per share were up 17% to $0.55 ($0.64 after adjusting for restructuring charges), compared to analyst expectations of $0.59. The company reaffirmed previous guidance for full-year EPS growth of 25% to around $2.26, but analysts had been thinking it would be able to earn $2.30.
Coal shipments, particularly for export, were strong, with a 27% increase in revenue. Revenue from intermodal shipments was also a bright spot, up 7%. The company was able to make gains from increased pricing, with "same store" sales pricing up 3.7% over a year ago. CSX's efficiency improvements are paying off as well, with $90 million in efficiency gains during the quarter, exceeding inflation in costs.
"We are implementing Precision Scheduled Railroading on an expedited timetable, converting switching operations, balancing the network, streamlining resources and getting more out of our assets," said CEO E. Hunter Harrison in the press release. "Although there still remains a lot to be done, we are confident that these initiatives will drive improved customer service, greater resource efficiency and superior shareholder value."
The results were generally good across the board, but investors appeared to be concerned about what's ahead for the second half, despite the fact that management held firm on guidance. With CSX stock up a strong 44% in the year so far, it may be that investors' hopes were getting a little ahead of reality.
