The Wall Street Journal-20080213-DepoMed- Dyax Rise- Ambac Falls
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DepoMed, Dyax Rise; Ambac Falls
Full Text (564 words)Broad gains for the second straight session, led by increases for small-capitalization financial and industrial stocks, helped erase some of the sting from last week's selloff.
"All sectors are up, though there's not one particular standout," said Christopher Colarik, portfolio manager at Glenmede Investment Management in Philadelphia.
For the session, the Russell 2000 index of small-cap stocks rose 5.73, or 0.82%, to 705.48. The Standard & Poor's SmallCap 600 increased 2.60, or 0.7%, to 372.53.
Before the opening bell, investor Warren Buffett said Berkshire Hathaway, his investment vehicle, offered a financial lifeline to several embattled bond insurers. On the report, Ambac Financial Group fell $1.58, or 15%, to $8.90, while Assured Guaranty, despite posting a fourth-quarter loss, rose 1.59, or 7.4%, to 23.10, both on the New York Stock Exchange.
Financials rose on the report, including Independent Bank Corp. of Michigan, up 66 cents, or 5.9%, to 11.80, and SWS Group (NYSE), up 71 cents, or 5.3%, to 14.21.
While earnings reports have damped many financial stocks in 2008, two brokerages bucked the trend yesterday. Stifel Financial rose 5.31, or 12%, to 47.90 on the NYSE after the St. Louis firm posted a higher fourth-quarter profit and increased revenue.
In addition, niche brokerage firm Evercore Partners posted higher fourth-quarter advisory revenue, sending its shares up 1.60, or 9.1%, to 19.22, on the NYSE.
Small caps also were buoyed after the Philadelphia Federal Reserve published a forecast that the economy is likely to escape a recession. On the forecast, as well as a report of higher fourth-quarter earnings, one noted industrials company moving upward yesterday was Forward Air, which increased 3.44, or 12%, to 33.35.
After disclosing it would sell itself in two transactions for $9.61 a share, GMH Communities Trust increased 3.08, or 55%, to 8.67, on the NYSE. The Newtown Square, Pa., company said it would sell its military-housing division to the United Kingdom's Balfour Beatty and then merge the rest of the company with American Campus Communities.
Several medical small-caps also rose, including DepoMed, up 46 cents, or 14%, to 3.73. The Menlo Park, Calif., specialty pharmaceutical company said a Phase II study evaluating Gabapentin to treat moderate to severe menopausal hot flashes showed positive efficacy results.
Valeant Pharmaceuticals International rose 1.62, or 14%, to 13.25, on the NYSE. The Aliso Viejo, Calif., company said a Phase III trial of its retigabine epilepsy treatment demonstrated positive results on its primary efficacy endpoints.
NxStage Medical, of Lawrence, Mass., fell 4.26, or 33%, to 8.49, after the dialysis-products maker posted a wider fourth-quarter loss, partly because of increased distribution expenses and increased spending in sales and marketing.
Zoltek fell 6.69, or 21%, to 25.94, after the St. Louis technology and advanced materials company posted lower fourth-quarter earnings and revenue than Wall Street expected.
Meanwhile, earnings reports provided a reason to buy into 99 Cents Only Stores (NYSE), which rose 80 cents, or 9.2%, to 9.48. The City of Commerce, Calif., general store operator posted higher fiscal third- quarter net income and a same-store sales increase of 2.9%. In addition, the company said it expects earnings to be higher in the second half of 2008 than in the first half.
However, Dycom Industries (NYSE) slid 8.01, or 34%, to 15.30. The Palm Beach Gardens, Fla., provider of specialty contracting services lowered its fiscal second-quarter earnings and revenue forecast.
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Rob Curran contributed to this article.
