Following through on yesterday’s decision from the Federal Reserve to not raise interest rates, and despite a disappointing existing-home sales figure for August, stocks moved respectably higher today. The S&P 500 ended the day at 2177.18, up 0.65%, while the Nasdaq Composite hit a record high of 5342.88 before closing at 5339.52
It wasn’t a banner day across the board, though. Virgin America Inc (NASDAQ:VA), Axovant Sciences Ltd (NYSE:AXON) and Jabil Circuit, Inc. (NYSE:JBL) all logged losing sessions, but for understandable reasons.
Jabil Circuit, Inc. (JBL)
Jabil Circuit may have topped last quarter’s earnings estimates, but not all analysts were impressed.
Last quarter — the company’s fourth fiscal quarter of the year — JBL earned 28 cents per share on revenue of $4.43 billion. The top line was better than the $4.38 billion the pros were expecting, and the bottom line beat estimates for a profit of 16 cents per share of JBL.
The numbers and the company’s Q1 guidance wasn’t enough to stave off a downgrade from Needham, however. The research outfit lowered its opinion on JBL from a “Buy” to a “Hold;” although it acknowledged that last quarter was solid, the Needham expressed concern about the foreseeable future. Tepid sell-through numbers were cited as a key reason for the downgrade.
JBL finished the day down 5.6%.
Axovant Sciences Ltd (AXON)
The race for an Alzheimer’s treatment, with biopharmaceutical company H. Lundbeck A/S- ADR (OTCMKTS:HLUYY) reporting today that its idalopirdine did not show meaningful success as a means of staving off cognitive decline. Idalopirdine, being tested in conjunction with Pfizer Inc. (NYSE:PFE) drug donepezil, was in late-stage (phase 3) trials, fanning the flames of disappointment.
News of Lundbeck’s failure with idalopirdine hit shares of American rival and peer Axovant Sciences particularly hard, as Axovant is developing an Alzheimer’s of its own based on the same basic science. AXON fell a hefty 12.5% on Thursday.
Nevertheless, some observers remain optimistic about Axovant Sciences’ chances with intepirdine, noting it’s different enough from idalopirdine that it may well show the necessary efficacy. Baird called the pullback from AXON “unwarranted.”
Virgin America Inc (VA)
Last but not least, just when it looked like the drama getting in the way of the union of Alaska Air Group, Inc. (NYSE:ALK) and Virgin America was finished, new drama unfurls, taking a 4.4% bite out of VA shares.
The latest in the saga? The Transport Workers Union, which represents Virgin America’s flight attendants (they call then teammates), managed to strike an accord with Virgin America’s corporate representatives. But, those flight attendants still rejected the offer the TWU and Virgin came up with.
The decision made by the roughly 900 teammates won’t necessarily quell the merger. But, it does make it difficult for Alaska Air Group to proceed, not knowing exactly what it will be obligated to do once the pairing is complete.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.