This was supposed to be the day that the U.S. stock market decoupled from dropping oil prices to focus on earnings, but after a strong start and a 300-point Dow advance, markets reversed course and headed lower throughout the afternoon.
A drop in commodity prices, along with oil’s decline and Germany downplaying another quantitative easing by the European Central Bank set the stage for a huge reversal to the downside.
At the closing bell, the Dow Jones Industrial Average was off nearly 0.2%, while the S&P 500 finished nearly 0.3% lower, and the Nasdaq Composite was off just fractionally. Conversely, crude oil finished stronger and was up nearly 0.9% by day’s end.
Telecommunication stocks were one of the few sectors to finish in the green. That sector has been showing good relative strength thus far in 2015. Biopharmaceuticals is another strong sector, with double-digit stock gains almost every day since the New Year began, and today’s top bio performer was Pharmacyclics, Inc. (PCYC).
Other stocks performing well today were Dunkin Brands Group Inc (DNKN) and IHS Inc. (IHS).
Dunkin Brands Group Inc (DNKN)
Helping to push DNKN stock to a 4% gain today was DNKN chairman and CEO Nigel Travis, who was on CNBC discussing its recent good earnings, forward guidance, franchise expansion and online ordering system for the Baskin Robbins brand.
It was also noted today that DNKN calls, especially the March $47.50 strike, are being very heavily purchased, pushing the implied volatility up from 4.9% to 31.1%. This is especially interesting because DNKN stock has been trading sideways between $42 and $48 for the last 10 months.
Pharmacyclics Inc. (PCYC)
PCYC stock was today’s biopharm sector champion, blistering 16% higher on 4.4 million shares traded after announcing better-than-expected fourth quarter earnings and guidance for 2015.
Revenue came in at $185 million, which was $15 million to $20 million above consensus estimates. Total revenue, including $100 million from partner Johnson & Johnson (JNJ), was $285 million, up 130% from a year ago, and well ahead of analysts’ estimates. PCYC was recently recommended as a buy by InvestorPlace’s Portfolio Grader.
It was also announced that the company’s sales of Imbruvica, a drug which treats blood cancers, will total $1 billion in 2015, ahead of the $892 million expected by Wall Street. PCYC stock is up nearly 70% since June 2014.
IHS Inc. (IHS)
IHS stock gapped up more than 6% on better than expected earnings and a lowering of their business costs. EPS of $1.68 per share beat the street’s view of $1.55 per share. Net income rose from 60 cents from a year ago to 87 cents per share for the quarter ending Nov. 30. Revenue was also up 4%.
IHS stock had recently fallen from $142 to $107 before rebounding this week to today’s closing price of $117.45.
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.
