The stock market started February on a downbeat note Monday, but strength in sectors outside the oil patch managed to help the Dow Jones Industrials recover from a 165-point loss to finish the day down just 17 points. Crude oil prices gave up much of their gains from last week, and that sent many energy-related stocks down sharply on the day. But for several stocks, company-specific news was enough to send them soaring. Among the best performers on the day were Twitter (TWTR 0.99%), Alere (NYSE: ALR), and JetBlue Airways (JBLU -0.58%).
Twitter climbed 7% on speculation that the long-struggling social-media company might go private. Reports of a rumored potential buyout bid from a couple of venture capital and private equity companies helped lift the stock off its recent lows, and some shareholders pointed to the fact that one potential exit strategy for Twitter has always been to find a larger company willing to acquire it in order to make a quick entry into the social-media space.
One private equity company in question, Silver Lake, reportedly didn't have any interest in taking a position in Twitter. But the stock still didn't give up its gains, and bullish investors have to think that there could be some company out there willing to take a gamble on Twitter's long-term prospects.
Alere soared 45% after Abbott Laboratories (ABT -0.23%) said it would buy the company in a $5.8 billion acquisition bid. Alere makes point-of-care tests that help doctors make rapid diagnoses of potential patient illnesses, such as tuberculosis, malaria, and HIV, and the company should make a good fit for Abbott Labs and its medical-equipment focus, especially because Abbott already has a substantial presence in the diagostics arena. If current concerns about the new Zika virus lead to increased awareness of the need for testing, then Abbott's acquisition of Alere could prove to be extremely well-timed and help it become an even bigger player in the growing diagnostics industry. Abbott believes the deal would add to its earnings immediately upon closing, making the acquisition look like a smart move for the healthcare company.
Finally, JetBlue Airways gained 5%. The airline said it would start flying between Los Angeles and Buffalo, but what was likely behind the move in the stock today was a combination of favorable factors for the airline and its industry at large. First, the drop in oil prices further supports JetBlue's recent reduction in costs, and as long as fuel expenses keep falling, it will help JetBlue remain more profitable. In addition, last week's fourth-quarter earnings report included record results for operating revenues, and net income for the full year nearly tripled on an adjusted basis from 2014's totals.
The airline industry has never been healthier, and JetBlue is working hard to make sure it claims at least its fair share of the resulting business going forward.