The past week mostly continued the 2012 trend of treating investors right -- though the gains weren't nearly as pronounced as they had been through the first few weeks of the year. While positive earnings news kept Mr. Market optimistic on the whole, there were some serious concerns that weighed on investors toward the back end of the week. Europe continues to a primary worry, and Greece in particular is causing a lot of nail-biting as it continues its tug-of-war with private investors to work out a debt compromise. In the U.S., meanwhile, the economic outlook took a hit when the advanced reading on fourth-quarter GDP growth came in below estimates.
By the time the dust had settled, the Dow Jones Industrial Average (INDEX: ^DJI) slipped by 0.5%. However, the broader Russell 3000 added 0.4%. The specific sector earnings results helped push the gains in a few sectors above the average.
Top 3 Performing Sectors
Russell 3000 Sector
Weekly Price Change
Month-to-Date Price Change
Source: S&P Capital IQ. Weekly price change is Jan. 20-Jan. 27. Monthly price change is Dec. 30-Jan. 27.
There's no secret to why Solutia (NYS: SOA) was one of the top-performing stocks in the Russell 3000 this week. The stock tacked on an impressive 48% for the week thanks to a buyout offer from Eastman Chemical. Eastman is offering roughly $4.7 billion -- or $27.65 per share -- for Solutia and is hoping that the acquisition will help the company increase its geographical reach, particularly in Asia. For starry-eyed Solutia shareholders, my fellow Fool Travis Hoium noted that with shares trading at nearly the deal value, now may be a good time to cash out if you don't want to end up with the Eastman Chemical shares that are part of the deal.
Hey, hang on a second! We're not done with deal-making yet. Genetic specialist Illumina (NAS: ILMN) saw its shares head for the moon after Roche Holding made a hostile bid for the company, valuing it at $5.7 billion. Excited shareholders boosted shares 42% for the week, taking them to well above what Roche offered to pay. And it sure looks like Roche will be left empty-handed if it's not willing to pony up more cash -- following the hostile bid, Illumina's board put a poison pill in place. A battle may be ahead, but my fellow Fool Brian Pacampara thinks it may be a good time for shareholders to get at least some of their investment out of the fracas and stand safely on the sidelines.
Top 3 Performing Russell 3000 Companies
Weekly Price Change
Source: S&P Capital IQ. Weekly price change is Jan. 20-Jan. 27. Includes only companies with a market cap of $250 million or higher.
Also among the week's top performers were Micromet (NAS: MITI) and Netflix (NAS: NFLX) . Sick of hearing about mergers and acquisiti ons yet? Chalk one up for the investment bankers, because it was a week chock-full of deals. Micromet's shares shot up 33% during the week thanks to a $1.2 billion buyout at the hands of Amgen. As Brian Orelli pointed out, the purchase will expand Amgen's presence in the cancer-treatment world, but that wider reach is coming at a rich price.
And then, of course, there's Netflix. What can I really say about Netflix at this point? Well, I could repeat the promise that I made when I was writing about Netflix's post-earnings spike -- that investors had better be ready for a wild ride. But I'm getting ahead of myself. Backing up the truck a bit, it was a blowout fourth quarter, and the resumption of subscriber growth for the company helped power a nearly 24% jump for the week. Less than one month into the new year, Netflix's shares are now up -- are you ready for this? -- 79%. That'll give you a smile that's tough to wipe off.
That's it for this week's top-performers recap. If you're looking for some ideas for strong outperformers for the rest of year, The Motley Fool has created a brand new free report titled "The Motley Fool's Top Stock for 2012." In it, my fellow Fools reveal a top pick that's poised for explosive growth ahead. Get instant access by clicking here -- it's free.
At the time thisarticle was published Motley Fool newsletter serviceshave recommended buying shares of Netflix and Illumina. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.
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