Rally to records
An afternoon rally pushed the Russell 2000 and the Dow to new records. The Russell 2000 added 5.82 points, or 0.69%, to a close of 843.35, above its May 22 achievement of 839.22. The Dow Jones Industrial Average gained 111.74 points, or 0.83%, to close at 13,633.08, improving on its previous record of 13,556.53 on May 18.
Trading began on a sour note following news he Shanghai Composite Index fell 6.5% on Wednesday after China’s Ministry of Finance tripled a trading transaction charge in order to reign in the booming stock market.
U.S. stocks cautiously approached the flat line in the afternoon, but rallied when minutes from the May 9 meeting of the Federal Open Market Committee showed that officials expect economic growth to pick up by the end of the year despite the slumping housing sector.
However, officials did not mention the possibility of a cut in interest rates.
Among individual small-cap companies:
Shares of Novacea, Inc. (Nasdaq: NOVC) were the big winners today, at one point more than doubling before settling at $15.00, up $6.94, or 86%. Before the opening bell the San Francisco-based pharmaceutical company announced an exclusive license agreement with Schering-Plough Corp. (NYSE: GSP) to develop and commercialize the prostate cancer drug Asentar. Novacea will receive an upfront payment of $60 million, a license fee of $25 million, as well as a commitment by Schering-Plough to purchase $12 million of Novacea common stock at a predetermined price within ten days of the closing. The company could bring in as much as $380 million in pre-commercial milestone payments.
Solarfun Power Holdings Co., Ltd. (Nasdaq: SOLF), a Chinese manufacturer of photovoltaic cells, began the year with a net loss of $0.3 million, compared with a net income of $4.3 million in the first quarter of 2006. However, net revenues increased 86.1% to $24.7 million, compared with $13.3 million a year earlier, the company reported before the opening bell. Looking ahead to the fiscal 2007, the Solarfun Power said it expects net revenue of $250 million to US$270 million, representing year-over-year growth of 209% to 234%. Wall Street is forecasting revenues of $269.4 million. Shares fell $2.82, or 23%, to close at $9.60.
Shares of CytRx Corp. (Nasdaq: CYTR) appreciated $0.57, or 16%, to $4.08, following news that its drug candidate iroxanadine accelerates wound healing. An animal study involving mice genetically predisposed to diabetes showed that those whose skin wounds were treated with iroxanadine had faster recovery times, the Los Angeles-based pharmaceutical company said before the start of trading. CytRx added that it will move the drug to a Phase II clinical trial in the coming months. Iroxanadine is intended for diabetics who suffer from ulcers that sometimes lead to amputation.
