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Mid-Afternoon Market Update: Dow Jumps Over 250 Points; Diamond Resorts Shares Climb Following Apollo Deal

T.CM, PCYO, LPCN, GIS, ESPR

 


Toward the end of trading Wednesday, the Dow traded up 1.51 percent to 17,673.28 while the NASDAQ climbed 1.92 percent to 4,781.91. The S&P also rose, gaining 1.64 percent to 2,069.45.

Leading and Lagging Sectors

On Wednesday, energy shares rose by 2.7 percent. Top gainers in the sector included Oasis Petroleum Inc. (NYSE: OAS) and Pioneer Energy Services Corp (NYSE: PES).

In trading on Wednesday, utilities shares rose by just 0.5 percent. Meanwhile, top losers in the sector included Huaneng Power International Inc (ADR) (NYSE: HNP), down 2.5 percent, and Pure Cycle Corporation (NASDAQ: PCYO), down 2 percent.

Top Headline

General Mills, Inc. (NYSE: GIS) reported better-than-expected results for its fourth quarter and issued an upbeat earnings forecast for the fiscal year 2017.

General Mills reported quarterly net earnings of $379.6 million or $0.62 a share, sharply higher than $186.8 million or $0.30 a share in the year-ago quarter. On an adjusted basis, earnings fell 12 percent to $0.66 a share from $0.75 a share in the comparable period. Street analysts estimated the company to deliver EPS of $0.60.

For the fourth quarter, the company's net sales slipped 8.6 percent to $3.93 billion from $4.3 billion in the previous year quarter. Analysts predicted $3.86 billion revenue. The company said that net sales decreased two percent on a constant currency basis.


Equities Trading UP

TESARO Inc (NASDAQ: TSRO) shares shot up 109 percent to $77.78 after the company reported that its drug niraparib significantly improved progression-free survival for patients with ovarian cancer.

Shares of Diamond Resorts International Inc (NYSE: DRII) got a boost, shooting up 24 percent to $29.76 after the company reported a deal to be purchased by affiliates of certain funds managed by affiliates of Apollo Global Management LLC (NYSE: APO) at $30.25 per share in cash.

PrivateBancorp Inc (NASDAQ: PVTB) shares were also up, gaining 24 percent to $44.44 after Canadian Imperial Bank of Commerce (USA) (NYSE: CM) revealed it struck a definitive agreement to buy PrivateBancorp and its subsidiary, The PrivateBank, for $47.00 a share.

 

Equities Trading DOWN

Galena Biopharma Inc (NASDAQ: GALE) shares dropped 83 percent to $0.35 after the company revealed it discontinued NeuVax™ (nelipepimut-S) Phase 3 PRESENT (Prevention of Recurrence in Early-Stage, Node-Positive Breast Cancer with Low to Intermediate HER2 Expression with NeuVax Treatment) clinical study. The company added that on June 27, the IDMC recommended that the PRESENT trial be stopped due to futility. Raymond James downgraded Galena Biopharma from Outperform to Market Perform.

Shares of Lipocine Inc (NASDAQ: LPCN) were down 52 percent to $3.00 following announcement of a Complete Response Letter from the FDA. The response letter noted deficiencies in dosing algorithm on label.

Esperion Therapeutics Inc (NASDAQ: ESPR) was down, falling around 40 percent to $9.79 after failing to reach an agreement with the FDA regarding a definitive approval path for its ETC-1002, a cholesterol-lowering pill. JP Morgan downgraded Esperion Therapeutics from Overweight to Neutral and lowered the price target from $50.00 to $15.00, while Credit Suisse also downgraded the stock from Neutral to Underperform and lowered the price target from $23.00 to $10.00.


Commodities

In commodity news, oil traded up 3.72 percent to $49.63 while gold traded up 0.75 percent to $1,327.80.

Silver traded up 2.97 percent Wednesday to $18.42, while copper rose 0.69 percent to $2.19.

Eurozone

European shares closed higher today. The eurozone’s STOXX 600 gained 3.09 percent, the Spanish Ibex Index rose 3.45 percent, while Italy’s FTSE MIB Index climbed 2.21 percent. Meanwhile the German DAX climbed 1.75 percent, and the French CAC 40 gained 2.60 percent, while U.K. shares rose 3.58 percent.

Economics

The MBA reported that its index of mortgage application activity fell 2.60 percent for the week ended June 24, 2016.

U.S. personal spending rose 0.40 percent for May, versus economists’ expectations for a 0.40 percent growth. Personal income increased 0.20 percent in the month, versus economists’ estimates for a 0.30 percent gain.

The National Association of Realtors’ pending home sales index declined 3.7 percent to 110.8 in May, versus a downwardly-revised reading of 115.0 in April. Economists were expecting a 1.1 percent decline.

U.S. crude supplies declined 4.1 million barrels for the week ended June 24, the U.S. Energy Information Administration reported. However, analysts were projecting a drop of 2.4 million barrels. Gasoline supplies rose 1.4 million barrels, while distillate stockpiles slipped 1.8 million barrels last week.

Data on farm prices for June will be released at 3:00 p.m. ET.



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