Biotech Was Hot Today, Here’s Why…

Stocks
were mixed Monday, with the Dow and SPX in the green, but the Nasdaq closing
red.
The major indices got off to a very
positive start thanks to the better-than-expected ISM numbers. Positive trial
results from several biotech firms and Goldman Sachs raising estimates on
several airline issues including AMR
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and Continental
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also
contributed to the rally. Bonds are selling off after the ISM numbers. The dollar is slightly
up after Present Bush’s comments on a strong dollar policy.

The Dow Jones Industrial
Average

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gained 47.55 at 8,897.81. The S&P 500
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rose 3.41 at 967.00. The Nasdaq
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lost 5.16 at 1590.75.

The day’s leading sectors were
Airlines
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, +5.90%, Natural Gas
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,
+1.40%, Biotechs
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,
+1.31%, and Broker Dealers
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, +1.00%.

Weak today were
Semiconductors

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, -2.68%, Internet
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,
-1.45%, and Computer hardware
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, -0.76%.

In economic news,
Construction Spending in April
fell 0.3% vs. an expected gain of 0.2%. This
was the third straight month of declines. ISM Index for May rose to 49.4
from April’s 45.4. This was better than the expected reading of 48.5. However,
this was the third month that the index had been under 50. (Readings above 50
indicates expansion.)

The 10-year U.S. Note
was -155 at 118 185.

The dollar was +0.15 at
93.46.

Gold was +0.80 at 365.60

Crude Oil was -.04 at
30.67.

Volume was heavy at
91,666,283,000 on the NYSE, and at
2,502,820,000 on the Nasdaq.

Market breadth was very
positive
, with NYSE advancing issues over declining issues by a ratio of
1.80, and up volume over down volume by a 2.16 ratio. Nasdaq advancing issues
over declining issues at 1.12, and up volume over down volume is at a 1.20 ratio.

Top Dow stocks were:

Hewlett Packard
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, +0.55 at
20.05, Boeing
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,
+1.29 at 31.96, J.P. Morgan
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,

+1.06
at 33.92, General Motors
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+1.01 at 36.34, and SBC
Communications

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+0.34 at 25.80.

Stocks in the news:

Biovail
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was
higher and traded at a new 52-week high. The company purchased the rights
to Ativan and Isordil drugs from Wyeth
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. Ativan is used in the
treatment of anxiety disorders while Isordil is used to prevent angina. Biovail
will pay $130 million for the rights plus payments over three years.

Genetech
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traded higher on more than double its average volume. The company reported
better than expected results from its colon cancer drug, Avastin. Results from
clinical trials showed a 50% increased in survival rates for patients taking
Avastin plus chemotheraphy.

Imclone Systems
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was higher on very heavy volume. The shares are on fire today after the
company reported positive results of its experimental cancer drug, Erbitux.

J.D. Edwards
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was higher on very heavy volume after the company announced that it was
being acquired by Peoplesoft
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. In a stock deal worth $1.7 billion,
JDEC shareholders will receive 0.86 Peoplesoft shares for each share of JDEC.

Mylan Labs
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was
higher after receiving FDA approval for its heartburn drug, Omeprazole.
Omeprazole is the general version of AstraZeneca’s top selling Prilosec.

Pixar
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was
higher on heavy volume. The animation company’s film “Finding Nemo”, was
the nation’s top grossing movie over the weekend.