Dovish Stance Is Sending Stocks Flying Higher (CALM, AONE, ARNA, LCC, WZENY, TSL)
While the jobs market has shown some nice improvement, Fed Chief Ben Bernanke came out with cautious comments saying “continued accommodative policies” could be needed to help ensure further improvements. The dovish stance helped push stocks up, adding fuel to the current bull market. While we think we’ll eventually see a spring/summer pullback, it’s also worth noting that April has been the strongest month of the year for the market by a wide margin the last several years.
The Korea Stocks and ADRs Index was the top performing tickerspy Index on the day, led by Webzen (WZENY) with a 18% gain. The Chinese Solar Stocks Index was the day’s worst performing tickerspy Index, with Trina Solar (TSL) down -5%.
Stocks soared on the day, led by a 55-point, or 1.8%, gain in the Nasdaq to 3,123. The Dow surged 161 points to 13,242, while the S&P jumped 19 points to 1,417. Oil edged up 16 cents to $107.03 a barrel, while gold added $23.20 to $1,685.60 an ounce.
In economic news, the National Association of Realtors said its Pending Home Sales Index fell -0.5% to 96.5 in February. Economists had expected pending home sales to rise 1% last month.
In earnings news, shares of egg seller Cal-Maine Foods (CALM) slid -6.1% after the company said its fiscal third-quarter profit declined -22% to $26.1 million, or $1.09 per share, from $33.6 million, or $1.40 per share, a year earlier. Revenue climbed 11% to $303.7 million. Selling prices for eggs rose 3.3%, but feed costs rose 4.5%, Cal-Maine said. Three pros counted Cal-Maine among their top holdings at the end of Q4 and nearly 200 tickerspy members own the stock in their portfolios.
Shares of A123 Systems (AONE) tumbled -12.4% after the battery maker for electronic cars said it could spend up to $5 million replacing defective battery modules. The company said five automobile customers received parts that could have had defective cells. A123 went public in late 2009 and has yet to turn a profit.
Shares of biotech firm Arena Pharmaceuticals (ARNA) surged 24.9% after the company said European Union regulators are reviewing its marketing application for lorcaserin. Lorcaserin is Arena’s experimental weight loss drug, which the FDA did not approve in 2010. Arena did not say when it expects a decision from the European regulators.
Shares of U.S. Airways (LCC), the country’s fifth largest airline, rose 2.5% after Bloomberg News reported the company has met with some unsecured creditors of bankrupt American Airlines to help gain support for an acquisition. The company is hoping to strike a deal before American parent AMR Corp. exits Chapter 11. Five pros counted U.S. Airways among their top holdings at the end of Q4 and nearly 300 tickerspy members own the stock in their portfolios.
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