Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The S&P 500 Index (SNPINDEX:^GSPC) capped off 2013 with a "Santa Claus Rally" that sent the index to fresh all-time highs and secured the benchmark its best year since the 1990s. Then, when 2014 got under way and the stock market started retreating from its record levels, shortsighted headlines started popping up in financial media bracing us for a year full of financial calamity. But with a brief two-day rally sending the S&P to record highs once again, all order has been restored to the universe and the overly bullish headlines have returned. While stocks may still be a little pricey, investors didn't seem to care, and the S&P 500 rose 9 points, or 0.5%, to close at 1,848, an all-time high.
Shares of Regeneron Pharmaceuticals (NASDAQ:REGN) certainly didn't do their part in pushing the index to new highs, as the stock slumped 4.3% Wednesday. If you're a Regeneron Pharmaceuticals shareholder and your neck's bugging you, that's because you're an unfortunate victim of Wall Street whiplash. When CEO Len Schleifer blabbed on about how great he thought domestic sales of the company's age-related macular degeneration drug would turn out to be in the fourth quarter, shares surged 11.8% yesterday. Then Regeneron announced a new partnership with Bayer later in the day, which kept the bull run going -- until today. Trading at a 40 P/E, short-term investors anxious to lock in profits did exactly that, selling the stock en masse and giving unwitting long-term investors a distinct pain in the neck.
Oil refiners have seen finer days than today as well. Out of the 17 largest publicly traded refiners in the world, 13 of these industry titans saw their stock slip Wednesday. As one might imagine, this was no coincidence, and industry-specific dynamics were to blame. The homegrown Texas refiner Tesoro (NYSE:ANDV) ended in especially bad shape, losing 3.3% as the price of oil rallied above $94 a barrel. Stock in oil refiners often display an inverse relation to the price of oil itself, as better margins tend to go with falling oil prices.
This phenomenon plagued Marathon Petroleum (NYSE:MPC) investors as well today, as the stock took a 2.8% haircut. One long-term situation to watch in the oil refinery space is what ends up happening with the legality of U.S. oil exports. Current policies all but ban U.S. companies from exporting oil abroad, a stance that's allowed companies like Marathon Petroleum to refine U.S. oil until it's no longer technically oil, and then sell their product abroad. Interestingly, Marathon Petroleum maintains it would not protest if the antiquated laws were done away with, as the policy shift would embrace the idea of free markets. Should the effective export ban be lifted, only time will tell if shareholders find themselves in agreement.