Major benchmarks bounced back on Tuesday, although even the huge gains that the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) managed to post only clawed back a fraction of what they lost Monday. Market participants took some comfort in the efforts that the U.S. government and its counterparts across the planet have made toward trying to protect the global economy from the negative impacts of the COVID-19 outbreak.

Today's stock market

Index

Percentage Change

Point Change

Dow

4.89%

1,167

S&P 500

4.94%

136

Nasdaq Composite

4.95%

394

Data source: Yahoo! Finance.

Not all of the news was related to coronavirus concerns; Cypress Semiconductor (NASDAQ:CY) saw its stock skyrocket after getting a key approval in its proposed acquisition. Meanwhile, Inovio Pharmaceuticals (NASDAQ:INO) saw its stock fall sharply for the second straight day, despite trying to fight back against bearish arguments from a prominent short-selling investor.

Securing the go-ahead

Shares of Cypress Semiconductor soared almost 50% after the company got a key approval. Some had started to fear that the proposed acquisition of Cypress by Infineon might face opposition from the U.S. government, but the latest news restored faith in the deal going forward.

Person holding a semiconductor chip in a gloved hand.

Image source: Getty Images.

Cypress said late Monday that the Committee on Foreign Investment in the United States had determined that there were no problematic national security concerns that would justify blocking Infineon's proposed acquisition. Even though Germany-based Infineon has a significant relationship with customers in China, the CFIUS in the end decided that those business dealings weren't large enough to be fatal to the deal.

The gain might look steep, but it only reflects the recovery of losses that shareholders have suffered in recent days as worries about the acquisition surfaced. Under the terms of the acquisition, Infineon is set to pay Cypress shareholders $23.85 per share in cash. As recently as March 5, the stock price was above $23 per share.

Even with today's gains, the current share price is nearly 5% below the acquisition price. That suggests that the deal closing isn't yet certain -- but there's no doubt that the CFIUS approval was a key part of the two tech companies moving forward.

Inovio gets a target on its back

Meanwhile, Inovio Pharmaceuticals saw its stock plunge 42%, causing further damage after its 30% drop Monday. The promising biotech company had seen its stock run up as investors hoped that it would be able to come out with a vaccine that could help stop the novel coronavirus outbreak in its tracks. Yet the upward move came to an abrupt end when a prominent short-seller weighed in with skepticism about the stock.

Citron Research attacked Inovio's business model on Monday, questioning the idea that the company's DNA-based process could truly create a viable vaccine as quickly as Inovio has claimed. Citron went on to make typically aggressive arguments that the U.S. Securities and Exchange Commission should step in to investigate Inovio and setting a $2 price target on the stock.

Inovio responded by questioning Citron's ability to understand the science behind Inovio's proprietary technology. In particular, the whole basis of DNA-based medicine centers on getting a look at the genetic structure of a virus, and Inovio still expects to start clinical trials within the next month.

At this point, Inovio shares trade only a bit above where they did before the coronavirus became news. Investors should expect further volatility, but there's still a lot of uncertainty about how quickly Inovio would actually be able to capitalize on a potential vaccine even if it's successful.