On 2015’s first trading day, the U.S. stock market came out roaring at the opening bell but was slapped with a wake up call when the Institute for Supply Management’s (ISM) December index of factory orders came in at 55.5, a bit less than the 57.6 number expected. The number also was well below November’s reading of 58.7, and represented a six month low.
Stocks abruptly turned around and after giving up all of their initial gains, fell into the red for much of the day before a slight rally at the close. The Dow Jones Industrial Average rose just marginally, while the S&P 500 and Nasdaq declined by just a few basis points.
Very few U.S. sectors were up today, but one would have thought it was the Chinese New Year the way some of the Chinese Internet stocks were soaring today, including SouFun Holdings Ltd (SFUN). Meanwhile, Linn Energy LLC (LINE) and Brainstorm Cell Therapeutics Inc (BCLI) led the way back home.
Linn Energy LLC (LINE)
Linn Energy announced it was cutting its dividend early this morning, and after a 6% pre-market selloff, LINE stock reversed course to rocket up almost 12%. The news also helped LinnCo LLC (LNCO), which owns shares of LINE as 100% of its invested capital, to climb 11%. Perhaps traders felt a sense of relief that the dividend was only cut from $2.90 per share to $1.25, because there had been some speculation of a more severe cut or even elimination. At today’s closing price of $11.34, the dividend yield is still a healthy 11%.
Additional news helping to lift LINE stock was the signing of a nonbinding letter of intent with GSO Capital Partners LLC, an asset manager that is part of The Blackstone Group, L.P. (BX). GSO will now assist in funding LINE’s oil and natural gas development projects.
Brainstorm Cell Therapeutics Inc (BCLI)
BCLI stock was the champion of the entire stock market today, surging more than 56% to all-time highs on tremendous volume of 24.1 million shares. The stock surge comes one trading day ahead of Brainstorm’s expected announcement of positive results from its Phase 2a trial of NurOwn, a stem cell therapy for Amyotrophic Lateral Sclerosis (ALS), often referred to as Lou Gherig’s disease. BCLI stock gapped well above previous resistance at $5.50 before closing at $7.45.
Perhaps Brainstorm CEO Tony Fiorino may have tipped his hand when he stated, “We are very excited to share the final results of this study.”
SouFun Holdings Ltd (SFUN)
SouFun, an online real estate company, rose almost 12% to $8.31 on a raise in the yuan limit for home purchase mortgages in the city of Bejiing, through its Housing Public Accumulation Fund. The improvement amounts to the U.S. equivalent of an increase from $130,000 to $193,000.
The housing accumulation fund is a housing fund set up by companies and employees every month, and has some similarities to the U.S. 401k.
Bejiing’s housing market has recently been slowing, and SFUN stock had fallen from $12.50 to $7 per share from September to late December.
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.