Stocks fluctuated between positive and negative territory on Thursday, with the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) eventually closing narrowly in the red.

Today's stock market

Index Percentage Change Point Change
Dow  (0.10%)  (22.86)
S&P 500  (0.02%)  (0.44)

Data source: Yahoo! Finance.

Interest rates tumbled, sending financial stocks down. The SPDR S&P Bank ETF (NYSEMKT:KBE) fell 2.4%. Gold also rallied to a new high for the year, with the SPDR Gold Shares ETF (NYSEMKT:GLD) closing 1% higher.

As for individual stocks, RH (NYSE:RH) shot up on its second-quarter results, and Alnylam Pharmaceuticals (NASDAQ:ALNY) tumbled after the death of a patient in one of its clinical trials led it to suspend two of them.

Stock prices on a yellow background

Image source: Getty Images.

RH surprises with a solid quarter

Shares of luxury home furnishings vendor RH, formerly known as Restoration Hardware, soared 44.8% after it reporting sales and earnings that blew away analysts' estimates and exceeded guidance the company provided three months ago. Revenue increased 14% to $619 million, compared to a guidance range of $595 million to $610 million, and adjusted earnings per share were up 48% to $0.65, dwarfing the guidance for $0.38 to $0.43.

The company attributed its outperformance to streamlined operations, a redesign of its supply chain, and success with its membership model, which is paying off in lower returns, exchanges, and cancellations, and in improved merchandise margins. RH also generated a whopping $167 million in free cash flow in the quarter, contributing to share repurchases that have amounted to 49.5% of the shares outstanding at the beginning of the year.

"While 2016 was a year of transformation and transition, 2017 will be a year of execution, architecture, and cash at RH," said CEO Gary Friedman in the press release. "Our efforts are focused on executing our new business model, architecting a new operating platform, and maximizing cash flow by increasing revenues and earnings, and reducing inventory and capital investments."

After a series of missteps and excuses in 2016, investors had grown skeptical of RH's new business model and apparent recovery, and short interest climbed to high levels. The huge investor reaction to Thursday's announcement, while only returning share prices to levels seen six weeks ago, is at least partial vindication for RH bulls.

Alnylam halts trials after patient death

Biotech Alnylam Pharmaceuticals tumbled 15.7% after the company announced it was suspending two late-stage drug trials of its hemophilia drug due to the death of a patient. 

At this point, it is unclear whether Alnylam's drug, fitusiran, is connected to the death. The deceased patient had developed exercise-induced hip pain, and had been treated with concentrated clotting agents for a suspected bleeding problem. When the patient developed a severe headache, he was diagnosed with a brain hemorrhage and treated with clotting factor for two more weeks before passing away. Further investigation revealed that he actually had a fatal blood clot in the brain, and the possibility of fitusiran's involvement led the company to play it safe and halt trials involving the drug, including the phase 3 Atlas trial that is expected to read out in mid to late 2019.

Although it is far from certain this event will have any long-term effect on the company's prospects, investors were no doubt spooked as they recalled that the company had to completely halt development of another RNA interference drug last October due to higher than expected  mortality rates among trial subjects. When that news broke, it resulted in the stock plummeting 48% in a single day. This delay will be a setback, but shortly, investor attention will refocus on the results from phase 3 data due later this month from the Apollo trial of patisiran for the rare disease hereditary ATTR amyloidosis.

Jim Crumly owns shares of Alnylam Pharmaceuticals. The Motley Fool owns shares of and recommends Alnylam Pharmaceuticals. The Motley Fool recommends RH. The Motley Fool has a disclosure policy.