Tuesday’s Market Round-Up: All You Really Need to Know
Slow down a minute Endo Pharmaceuticals Holdings Inc (NASDAQ:ENDP) - there’s already a generic Lipoderm skin patch like the one you just submitted an NDA (new drug application for). At least that’s the story from Watson Laboratories Inc. (NYSE:WPI), which recently notified Endo Pharmaceuticals Holdings of the overlap.
Watson Laboratories Inc. invoked a ‘paragraph IV’ clause to let regulators – and Endo – know it has already filed for a copycat version of the same generic version of Endo’s post-shingles treatment. Though not necessarily a final decision, ENDP shares are down 3% on the news.
In Japan’s biggest non-financial firm bankruptcy ever, Japan Airlines Corp. will survive and keep flying thanks to a state-supported 600 billion yen credit line, 300 billion yen in cash, and a forgiven 730 billion yen worth of debt. Shareholders, bond owners, and the upper management team are just out of luck, and/or out of a job.
It’s the fourth time in ten years that Japan Airlines Corp. ahs been bailed out by its government.
McDonald’s Corp (NYSE:MCD) is up 1.5% today thanks to a Credit Suisse upgrade for the fast-food chain. The research firm cited the company’s international business should deliver significant earnings estimate increases.
McDonald’s ability to prosper in a tepid economic environment was also mentioned as a key reason for the optimistic outlook.
Monsanto says DuPont can’t market corn or soybean seed by touting both a ‘Roundup Ready’ genetic trait as well as an ‘Optimum GAT’ trait. The Roundup Ready trait (a Monsanto invention) is said to actually mask problem with the GAT genetic trait (which just so happens to be a DuPOnt invention). At least that’s the rationale from Monsanto Co. (NYSE:MON), which just claimed victory in a recent court case.
Despite that ruling, DuPont (NYSE:DD) is pressing on with its countersuit against Monsanto, citing Monsanto’s unwillingness to supply the Roundup Ready gene, which comes off its patent in 2014. DuPont says that action is a deliberate maneuver to limit competition within the seed marketplace.
The two cases are now clearly not one and the same, though they were running in parallel. The Monsanto victory in one argument only resolves half the issue, and effectively solves none of the overarching issue. There is no specific timeframe for DuPont’s next legal process steps.
Despite falling short of Wall Street’s estimates, TD Ameritrade Holding Corp’s (NASDAQ:AMTD) shares are up 4.3%. The second-biggest discount broker saw earnings decline by 26%, on a 2.3% increase in revenue. Representatives of TD Ameritrade Holding Corp. said trading activity ground to a halt in November and December, though has resumed to normal levels so far this year.
Navistar International Corp’s (NYSE:NAV) may not have a great 2010, according to its recent self-outlook. The stock rebounded somewhat after tumbling 10% on the unwelcome news of an EPS between $1.75 and $2.25 this year. But, NAV is still in the red by 3.5%.
Those numbers are well shy of the $3.49 that analysts expected from Navistar International Corp. this year. The company does see an end to its three-year sales decline in 2010, though a slow recovery or recession could pose a risk of a fourth straight annual sales decline for the truck manufacturer.
Humana Inc. (NYSE.HUM), Coventry Health Care (NYSE:CVH), Aetna (NYSE:AET), and a whole slew of other health care plan providers and HMOs are up today on hopes - perhaps assumptions - that Massachusetts will seat a Republican senator rather than a Democratic one in the special election underway to replace the late Edward Kennedy. By subtracting one Democratic senator, the GOP will have at least a shot at preventing the required majority President Obama needs to present pass the current version of his healthcare reform bill.
While on the surface, taking healthcare out of the government’s hands and leaving it managed by the likes of Humana Inc., Coventry Health Care, and Aetna seems like a reason to own these names, that’s not necessarily the case in this scenario. Even a Republican victory won’t inherently prevent the bill form coming to the floor for a vote, and even if the bill is defeated, that doesn’t mean these stocks are ownership-worthy.
Nevertheless, sentiment and speculation are ruling the day, and that may put enough gas in the tank to fuel a nice rally from this group…. particularly if Republican Scott Brown is elected.
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