Russell flat as Dow sets record
April 18 (SmallCapInvestor.com) – The Russell 2000 stumbled, but the Dow closed at a new record high as news of strong results from the financial sector offset tech sector woes. Among small caps, Avanir Pharmaceuticals (Nasdaq: AVNR) tripled on news of a successful drug trial, while shares of Intevac, Inc. (Nasdaq: IVAC) were downgraded.
The Russell 2000 lost for the second day, dropping 4.58 points, or 0.55 percent, to 824.38. The Dow Jones Industrial Average set a new record close, adding 30.80 points, or 0.24 percent, to 12,803.84. The previous record was 12,786.64, set on Feb.20.
Shares of Avanir Pharmaceuticals skyrocketed $3.92, or 308.66%, to $5.19 on news the company’s drug Zenvia decreases the nerve pain experienced by diabetics. A Phase III clinical trial showed that patients with diabetic neuropathic pain treated with the drug reported significantly less pain over 90 days when compared to patients given a placebo, the Aliso Viejo, Calif.-based company said before the opening bell.
Santa Clara, Calif.-based disk sputtering equipment provider Intevac, Inc. retreated following news of a downgrade by Goldman Sachs. After the opening bell the brokerage downgraded Intervac to “sell” from “neutral,” citing fears of a decline in orders due to slower sales of personal computer servers. The target price has been reduced to $23 from $29.50. Shares lost $2.82, or 10.55%, to close at $23.91.
Shares of biopharmaceutical company Genta Incorporated (Nasdaq: GNTA) moved into positive territory following news the drug maker will conduct a late-stage trial of its anticancer treatment Genasense. The trial should determine the safety of using Genasense in combination with a chemotherapy drug, Berkeley Heights, N.J.-based Genta said before the market open. Shares moved up $0.08, or 22.73%, to $0.41.
News from the financial sector was upbeat, with banking giant JPMorgan Chase & Co. (NYSE: JPM) reporting a record quarterly profit. Similarly, savings and loan heavyweight Washington Mutual, Inc. (NYSE: WM) posted a rise in profits at its card-services and retail-banking units.
The morning began with bad news from the tech sector. Search engine giant Yahoo! (Nasdaq: YHOO) reported an 11% drop in first-quarter profit late Tuesday, higher expenses offsetting an increase in revenue. Net income was $0.10 per share, one cent shy of analysts’ expectations.
International Business Machines Corp. (NYSE: IBM), the world’s biggest computer services company, was downgraded after it reported late Tuesday that first quarter service signings were below Wall Street’s expectations of $11.5 billion to $12 billion. Analyst Goldman Sachs downgraded the stock to “neutral” from “buy.”
