Wall Street started its holiday celebrations early on Monday morning, as major benchmarks were generally higher. Some positive news on the trade front lifted the moods of market participants after China said it would reduce some tariffs on key products at the beginning of 2020. As of 11:15 a.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 118 points to 28,574. The S&P 500 (SNPINDEX:^GSPC) gained 5 points to 3,226, and the Nasdaq Composite (NASDAQINDEX:^IXIC) picked up 24 points to 8,949.
Boeing (NYSE:BA) has been in the headlines a lot lately because of the continued grounding of its 737 MAX aircraft, and the company just took steps to hold leadership accountable for the situation. Meanwhile, Intra-Cellular Therapies (NASDAQ:ITCI) saw its stock more than triple on good news from its treatment pipeline.
Muilenburg runs out of runway
Shares of Boeing climbed 3% after the aerospace giant announced that CEO Dennis Muilenburg would resign, effective immediately. CFO Greg Smith will take over as interim CEO for a short period during the holidays, but current board chair David Calhoun will become the permanent CEO as of Jan. 13.
Boeing's board of directors justified the move, saying that it was "necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders." Calhoun will give his board chair role to Larry Kellner.
Muilenburg's departure follows what essentially was a game of chicken between Boeing and the Federal Aviation Administration, with the departing CEO having put pressure on regulators to get the 737 MAX recertified quickly. When the FAA pushed back, it became clear that Boeing's strategy hadn't worked.
Under Calhoun's leadership, Boeing expects to restore what it called "effective and proactive communication" with regulators across the globe. Whether that'll be enough to get the MAX back in the air quickly remains to be seen, but shareholders are optimistic that it's a step in the right direction for Boeing.
Intra-Cellular scores FDA approval
Shares of Intra-Cellular Therapies soared 250% after the biopharmaceutical company announced that the U.S. Food and Drug Administration had approved its Caplyta treatment for use in treating adult schizophrenia.
Investors had already been optimistic about Caplyta's chances, given the way that it performed in clinical trials. Caplyta significantly outperformed a placebo on an accepted scoring system for schizophrenia patients, with reasonable safety indications as well.
Schizophrenia is a tough disease to treat, affecting 2.4 million adults in the U.S. and many more globally. Intra-Cellular was pleased that Caplyta showed similar levels of weight gain and cholesterol and glucose levels as the placebo, suggesting that users of the drug might avoid some of the side effects that others suffering from the disease have had to deal with.
Intra-Cellular hopes to launch Caplyta commercially in the first quarter of 2020. Given the reaction from shareholders, there's a lot of optimism that Caplyta could be the blockbuster drug that Intra-Cellular investors have waited to see.