U.S. markets were broadly mixed today, which interestingly mirrored the earnings reports that were coming out — many stocks continued to beat estimates on earnings per share, yet company revenues were weaker. Much of the revenue problem was attributed to a higher U.S. dollar.
The Dow Jones Industrial Average also began the day higher, but was 0.5% lower by the closing bell. The S&P 500 did a bit better, off by 0.1%, while the Nasdaq Composite rose 0.4%. Sectors were also mixed today, with telecommunications and healthcare well ahead of the rest of the market.
They say that talk is cheap, but apparently not on Wall Street, where even a comment by an analyst on what a company should do, or a recap of a substantial purchase by a billionaire more than three weeks ago can propel stocks higher.
Voltari Corp (VLTC)
VLTC stock has become quite a story. Three weeks ago, Voltari, a small-cap marketing company, was selling for less than a buck a share. Then Carl Icahn decided to increase his position by more than 4 million shares. The stock jumped when word got out, and has been going parabolic ever since.
Without any new news, other than several financial sources rehashing old news about Icahn’s purchase, VLTC soared again today, up 55% on heavy volume of 26 million shares.
Icahn or not, VLTC stock is now quite overextended, so investors should be very careful before taking any new long positions.
Gilead Sciences, Inc. (GILD)
GILD stock jumped 4.5% today on little more than an analyst making a favorable comment that Gilead should acquire Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX).
Bernstein’s Geoffrey Porges commented today in a note to clients that a $45 billion takeover would give GILD a lucrative cystic fibrosis program to replace the money it may lose as other competitors come out with treatments for Hepatitis C.
Porges estimates that buying VRTX would push GILD stock, which closed today just above $105.
VRTX was also up more than 5% today.
Kimberly Clark Corp (KMB)
KMB stock gapped up 5.4% today after posting first-quarter earnings of $1.42, well above analysts estimates of $1.33. However, sales were off 4% to $4.7 billion, mostly due to the stronger dollar overseas.
KMB also reiterated a forecast for a $5.60- to $5.80-per-share profit for the coming year. Analysts have been predicting $5.64.
KMB stock has been basically flat for the year, even with today’s good showing.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.