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.
It was another day of generally poor economic data, but following yesterday's tumultuous drop in the S&P 500 (SNPINDEX:^GSPC) investors were willing to give the market a temporary reprieve.
Attempting to push the market lower was the release of December's factory order numbers which showed a decline of 1.5%, compared to November's expansion of 1.5%, due to a decline in aircraft orders. The good news, and the reason the market might be up today, was that excluding the weak transportation category new orders were actually up 0.2%.
Also helping push the S&P 500 higher today were a number of solid earnings reports, with upside surprises practically doubling downside surprises after the bell on Monday. Pessimists have honed in recently on weaker than expected top-line growth, so we'll certainly need to see an extension of these results throughout the remainder of earnings season if the S&P 500 is to continue heading higher.
By day's end, the S&P 500 had advanced by 13.31 points (0.76%) to close at 1,755.20, breaking a hefty two-day losing streak and bouncing nicely off its three-plus month lows.
Furiously leading the charge to the upside today was biopharmaceutical company Furiex Pharmaceuticals (NASDAQ: FURX), which ended higher by a "mere" 129.9% after rocketing higher by as much as 165% following the release of positive top-line data from two late-stage studies of its diarrhea-predominant irritable bowel syndrome drug, eluxadoline. According to Furiex, eluxadoline met its primary endpoint of simultaneously improving patients' stool while reducing abdominal pain. Although Furiex's 75 milligram dose failed to meet statistical significance, its 100 mg dose handily outperformed the placebo in trials. Furiex plans to file a new drug application for eluxadoline in the second quarter. While optimism is certainly warranted, I'd caution that the Food and Drug Administration's view of eluxadoline and a potential launch of the drug would have to be flawless for Furiex to maintain its current valuation.
Language, content, and testing software solutions provider Lionbridge Technologies (NASDAQ: LIOX) tacked on 29.4% after it reported better than expected fourth-quarter results. For the quarter, Lionbridge's revenue rose 12% to a record $127.5 million, as generally accepted accounting principles earnings per share improved to $0.10. By comparison, Wall Street expected just $0.05 in EPS on $121.7 million in revenue. Looking ahead, Lionbridge anticipates full-year revenue growth of 5% to 10%, perfectly bracketing the 7% that Wall Street has projected. Similar to Furiex, investors have every reason to be excited after today's news, but the stock move might be excessive given that Lionbridge is now valued at 25 times forward earnings and growing at between just 5% and 10%.
Finally, semiconductor materials company ATMI (NASDAQ: ATMI) popped 25.5% after announcing that it had agreed to a $1.15 billion buyout by rival Entegris (NASDAQ:ENTG). The deal itself values ATMI at $34 per share and will be funded in its entirety by cash. The reasoning behind the deal for Entegris is to reduce costs and leverage the combined entity to go after larger deals. The deal, though, shouldn't come as a huge surprise, as ATMI had hired Barclays to explore possible strategic alternatives for the company in November.