Apparently in 2012 the stock market can also go down. After a torrid start to the year, the markets posted a slight drop over the past week. In the U.S., investors cheered some better-than-expected economic data, including another drop in initial unemployment claims. However, by week's end, most eyes were fixed on the situation in Greece, where riots rocked the capital as the prime minister pushed another round of austerity measures aimed at securing the next slug of bailout funding. If Greece doesn't meet the demands of other Eurozone leaders, the country may be left to default next month, when its bonds come due.
By the time the dust had settled, the Dow Jones Industrial Average (INDEX: ^DJI) had fallen 0.5%, while the broader Russell 3000 shed 0.4%. The majority of the Russell 3000 sectors were in the red, but a few managed to eke out gains.
Top 3 Performing Sectors
|
Russell 3000 Sector |
Weekly Price Change |
Month-to-Date Price Change |
|---|---|---|
| Information Technology | 1% | 4.2% |
| Energy | 0.5% | 3.3% |
| Consumer Staples | 0.2% | 1.8% |
Source: S&P Capital IQ. Weekly price change is Feb. 3-Feb. 10. Monthly price change is Jan. 31-Feb. 10.
Representing the energy sector during the past week was the high-flying Cobalt International Energy (NYSE: CIE). The oil and gas explorer shot up on Friday following the company's announcement of positive results from test drilling in water off of Angola. Cobalt's CEO called the Cameia-1 well "an extraordinary success," while its chief exploration officer said the test confirms that the company is sitting on "a world-class carbonate reservoir." The results were so positive that Cobalt is skipping another planned exploratory well and instead initiating an appraisal drilling program to gather more data on the size of the Cameia oil discovery.
SureWest Communications, meanwhile, saw its shares spike after a hefty buyout offer from Consolidated Communications (Nasdaq: CNSL). The cash-and-stock deal, which values SureWest at $23 per share, gave shareholders a whopping 47% premium. Even with that eye-catching premium, Consolidated is so positive on the merits of the deal that the company said it will be accretive to free cash flow and earnings in the first full year after the close of the transaction.
Top 3 Performing Russell 3000 Companies
|
Company |
Weekly Price Change |
|---|---|
| Cobalt | 52% |
| SureWest | 43.7% |
| Guidance Software | 35.6% |
Source: S&P Capital IQ. Weekly price change is Feb. 3-Feb. 10. Includes only companies with a market cap of $250 million or higher.
Also among the week's top performers were Pharmacyclics (Nasdaq: PCYC) and Buffalo Wild Wings (Nasdaq: BWLD). We're still working our way through earnings season, and the big gains we saw in both of these stocks had to do with the respective companies' outperformance of Wall Street's targets. In Pharmacyclics' case, it absolutely crushed analysts' estimates of a $0.19-per-share loss by posting an adjusted profit per share of $0.82. The drug developer benefitted from a partnership it had struck with Johnson & Johnson subsidiary Janssen Pharmaceutical. By the time the fat lady did her singing for the week, Pharmacyclics' shares had tacked on 20%.
Meanwhile, Buffalo Wild Wings' earnings were so hot, they were bringing tears of joy to investors. For the fourth quarter, revenue jumped 35% while the bottom line increased 33%. Both the top and bottom line easily topped analysts' expectations. While it's hard to keep up growth that smokin' hot, management sees a none-too-shabby 20% earnings boost ahead for 2012. For the week, B-Wild's shares shot up 22%.
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