When things are going right, not even mixed economic data can push the broad-based S&P 500 lower.
The headline story that I would have expected to pressure the S&P 500 throughout the day was the weekly initial jobless claims figure. For this past week jobless claims bounced up 28,000 from their seven-year low of 298,000 to 326,000. While still exceptionally low relative to where the jobs market has come from, investors never want to see this figure moving higher, let alone by 28,000! Overall, the trend lower in jobless claims would appear to indicate that the jobs market is improving, but this large jump bears monitoring.
On the flipside, housing data provided a bit of a boost rather than hindrance for once. Existing home sales for April met economists' expectations of an adjusted annual run rate of 4.65 million homes, rising for the first time this year from 4.59 million in the previous month. This rebound isn't unexpected as the brutal winter months made selling a home difficult in many parts of the country. As warmer weather settles in it wouldn't be abnormal to see this figure continuing to climb.
Altogether, the investors and the S&P 500 took the good with the bad and added a little bit of better-than-expected earnings season icing on top and helped push the S&P 500 higher by 4.46 points (0.24%) to close at 1,892.49. The S&P 500 is once again within striking distance of a fresh all-time closing high.
Source: PublicDomainPictures, Pixabay.
While today's upside may have been modest, all things considered, NTELOS Holdings' (NASDAQ: NTLS) surge higher was anything but! NTELOS, a wireless communications services provider on the East Coast and Ohio River Valley roared 18.8% higher after announcing that it had extended its strategic network alliance with Sprint (S) through 2022. The deal, which covers approximately 2.1 million people in West Virginia and Virginia, gives NTELOS access to Sprint spectrum in these territories in an effort to better its network and align it with Sprint's to create faster wireless speeds for rural customers. However, keep in mind that NTELOS also announced that it would be shelving its dividend in order to save $36 million annually, and it lowered its full-year adjusted EBITDA to a new range of $128 million-$135 million from a prior view of $140 million-$150 million. While this appears to be a best case scenario for NTELOS, and it could give the company a number of options down the road, much of this optimism is likely baked into its shares after today's pop.
Cell Therapeutics (CTIC), a small-cap biopharmaceutical company focused on developing and acquiring therapies to treat cancer, galloped 13% higher on the day after research firm Ladenburg Thalmann initiated coverage of the company with a buy rating and a $6 price target. Based on yesterday's closing price, Ladenburg is projecting there is 136% upside potential to Cell Therapeutics' share price. The upgrade isn't all too shocking considering that Pixuvri has been approved and launched in a number of European markets and that we should soon be getting data on pacritinib, a JAK2/FLT3 inhibitor that could treat genetic mutations linked to myelofibrosis. But, you should also keep in mind that this is a company that's reverse split and diluted shareholders into oblivion over the past decade. While it does finally have a marketable product, there's no guarantee Pixuvri alone will lead Cell Therapeutics toward profitability. I'd still suggest staying far away from this stock and to generally ignore the analyst chatter surrounding it.
Finally, independent oil and gas exploration and production company Sanchez Energy (NYSE: SN) ballooned 8.8% after announcing that it had purchased 106,000 contiguous net acres of land from Royal Dutch Shell (RDS.A) in the Eagle Ford shale formation in Southern Texas for $639 million in cash.
Source: Sanchez Energy investor presentation.
The purchase will double Sanchez's proved reserves with the addition of 60 million barrels of oil equivalent, and push its production even higher to an estimated 42,800 barrels of oil equivalent per day. Best of all, 60% of the assets acquired are liquids which bear higher margins and less price volatility, meaning a bigger bang for Sanchez's buck over the long run. If you're an energy-savvy investor and you don't have Sanchez on your watchlist, then frankly I'm not sure what you're waiting for.
