Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
With Christmas just two short days away, the holiday grinches were put in their cages for the time being, and the anticipation of a strong holiday season for retailers pushed the S&P 500 (^GSPC -0.22%) decisively higher to a new all-time closing high.
Incredibly important economic data was generally at a minimum today, as you might expect just a few days before Christmas. However, positive personal spending data and consumer sentiment figures helped buoy the market, as well as a long-awaited deal involving Apple, the largest component by weighting of the S&P 500.
Personal spending increased 0.5% for November, which was more or less in line with expectations and signals that it may not be as poor of a retail season as the back-to-school start would have suggested. In addition, consumer sentiment remained unchanged at a reading of 82.5 despite the Federal Open Market Committee's tapering announcement, meaning consumers are increasingly positive on the outlook for the economy as a whole.
Perhaps the biggest market mover, though, was the announcement that Apple plans to start selling its phones on China Mobile's network beginning on Jan 17. This deal was long expected, but it should help dramatically broaden Apple's reach and perhaps help reverse a multi-quarter downtrend in year-over-year profit declines.
By day's end, the S&P 500 had advanced by 9.67 points (0.53%) to close at 1,827.99, another record close.
Leading the charge today was biopharmaceutical company United Therapeutics (UTHR 0.69%), which vaulted higher by 30.4% after announcing that the Food and Drug Administration had approved its Orenitram capsules for the treatment of pulmonary arterial hypertension. This marks the company's fifth approval for treating PAH, which is giving it quite the diverse array of treatment options. I would, however, caution shareholders not to get too caught up in today's approval, as there is an ongoing investigation into United Therapeutics' marketing practices for its three best-selling drugs. Until there's a resolution of that investigation, I would probably steer clear of this stock.
Shares of Xyratex (NASDAQ: XRTX) a modular solutions provider for the hard-disk drive/storage industry, skyrocketed 27.3% after announcing that it agreed to be acquired by Seagate Technology (STX) for $374 million net of cash, or $13.25 per share. The transaction is expected to close by mid-2014 and should contribute positive cash flow and $500 million to $600 million in revenue by 2015. With storage prices so prone to fluctuations, but the industry expected to be busy with the ramp-up or data center build-outs, the move makes a lot of sense for both parties involved.
Finally, shares of Meritor (MTOR), an integrated systems and components manufacturer for the transportation industry, gained 18.1% after a note from Morgan Stanley indicated that Meritor received a somewhat favorable ruling in a Delaware District Court today with Eaton's request for a pre-trial motion of judgment being denied. With the company's legal battle now heading to trial, it doesn't necessarily mean Meritor has any better chance of a victory, but it could mean the amount it's awarded, were it to be victorious, could be much higher. It's a stock worth monitoring, but I wouldn't suggest chasing it higher at this level.
