Stocks dipped Wednesday when the Federal Reserve announced plans to reduce its bond portfolio and hinted at another hike in the federal funds rate before the end of the year, but mostly recovered by the end of the day. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) ended up with small gains to lock in records.

Today's stock market

Index Percentage Change Point Change
Dow 0.19% 41.79
S&P 500 0.06% 1.59

Data source: Yahoo! Finance.

Bank stocks benefited from a rise in long-term interest rates in response to the Federal Reserve's plan to cut its balance sheet, and the SPDR S&P Bank ETF (NYSEMKT:KBE) gained 1.2%. On the other side of the coin, yield-sensitive issues such as consumer non-cyclical stocks fell; the Consumer Staples Select Sector SPDR ETF (NYSEMKT:XLP) dropped 1%.

As for individual stocks, shares of Bed Bath & Beyond (NASDAQ:BBBY) tumbled after the company reported disappointing sales and profit and lowered its outlook, and Alnylam Pharmaceuticals (NASDAQ:ALNY) soared following positive drug trial results.

Stock market graphs.

Image source: Getty Images.

Bed Bath & Beyond's disappointing quarter

Bed Bath & Beyond announced drops in sales and profit in its fiscal second quarter that were worse than already low expectations, and the stock got hammered today, closing down 15.9%. Sales fell 1.7% to $2.94 billion compared with expectations for $3.01 billion, with earnings per share of $0.67, down 40% from last year and well below analyst estimates of $0.95.

Some of the shortfall was blamed on one-time issues. Restructuring charges accounted for an $0.08 decrease in EPS, Hurricane Harvey dinged company profits $0.02 per share, and an accounting change cost $0.01. But all told, those events accounted for less than half the gap with what the market was expecting, largely because of a decline in comparable-store sales of 2.6%. Online sales grew more than 20%, but that segment still accounts for a small percentage of the total.

Furthermore, management offered little hope that sales will improve later this year. The company revised guidance for full-year EPS to $3.00 after having reaffirmed last quarter an outlook for a drop of at most 10% from last year, which would have amounted to $4.12 in per-share earnings. 

The market is skittish about brick-and-mortar companies that face competition from Amazon as it is, but Bed Bath & Beyond's results, stretching back several quarters and worse than management expected, seem to be confirming the market's fears for this company.

Alnylam's successful phase 3 trial

Shares of Alnylam Pharmaceuticals soared 51.7% today after the company announced positive results from a late-stage trial of its new drug patisiran, a treatment candidate for the rare disease hereditary ATTR (hATTR) amyloidosis.

The phase 3 trial of 225 patients with the disease met its primary efficacy endpoint as well as all secondary endpoints. hATTR amyloidosis is a debilitating, often fatal disease caused by a gene mutation that produces abnormal proteins that are deposited in the body's organs. The trial showed that patisiran reduced neurological impairment and improved quality of life compared with a placebo. The safety profile was excellent, with adverse events and patient deaths about the same for patients on the drug and those on the placebo.

Alnylam is pioneering a new approach to treating disease called RNA interference. So far, the company does not have any approved drugs, and it was only two weeks ago that the stock plunged almost 16% after halting two trials of another drug using the same technology after a patient death. Given that event and the withdrawal last year of one of the company's drug candidates due to patient deaths, the news of which caused the stock to plunge 48% the day it was announced, the positive safety and efficacy results from this trial were very encouraging to investors, and seemed to confirm the potential for the Alnylam's entire pipeline.

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