January may have started poorly, but at least for one day it looked like the bulls were ready to recapture Wall Street. Markets bounced back with a vengeance today, celebrating positive data from ADP, as well as the minutes from the Fed’s December Open Market Committee, indicating they could begin raising interest rates even with current inflation levels.
Wall Street was happy enough, as the Dow Jones Industrial average rose 1.23%, the S&P 500 finished 1.16% higher and the Nasdaq stepped up by 1.26%. It was the best showing in three weeks for the major indices.
Cyclical consumer goods and healthcare were the big winners today, with J C Penney Company Inc (JCP), Dick’s Sporting Goods Inc (DKS) and Arena Pharmaceuticals, Inc. (ARNA) standing out as three of the day’s best stocks.
J C Penney Company Inc (JCP)
Wall Street has become nostalgic recently, with JCP joining the likes of AOL, Inc. (AOL) and Boston Scientific Corporation (BSX) on the daily leaderboards. JCP stock catapulted more than 20% higher today after posting stronger-than-expected holiday sales. Comparable-store sales for the nine-week period were up 3.7%, a 0.6% increase over a year ago, and company executives said that fourth-quarter same-store sales growth should come in near the high end of their 2%-4% range.
Heavy use of promotions seems to have put JCP back on track with bargain hunting consumers. InvestorPlace’s Dan Burrows notes that the holiday sales bode well for JCP stock going forward, and while still risky, it could be the next “Best Buy 2013.”
Dick’s Sporting Goods Inc (DKS)
A Reuters report that Dicks Sporting Goods is exploring options with buyout firms to take the company private had DKS stock surging well more than 11% today. Lost in the fine print of the announcement was a caveat that there is no formal sale process going on, and the company could still decide against going private if they don’t like the offers they receive.
Despite the Street’s contention that DKS is lagging behind other similar retailers, DKS stock is still up 28% since its October lows.
Arena Pharmaceuticals, Inc. (ARNA)
ARNA stock was the big winner on Wall Street today, up more than 76% on a market leading 103.3 million shares, following a report of positive results in an early clinical trial for a treatment for autoimmune disorders. Arena said its ADP334 drug reduced lymphocyte counts in 50 healthy volunteers, with very few reported side effects, compared with a placebo given to a control group. ARNA cited similar results in which lymphocyte counts were reduced and have proven successful with other drugs that treat multiple sclerosis, psoriasis and ulcerative colitis.
ARNA also has several other potential drugs in phase 1 and phase 2 testing that could also spur the stock higher.
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.
