The Dow's Triple-Digit Gains Left These Stocks Behind


Investors can never predict whether the market will rise or fall on any given day, but lately, a pretty good bet has been to expect some substantial volatility in one direction or the other. For the sixth straight day, the Dow Jones Industrials made a triple-digit move, with today's result being a 138-point gain that signaled investor optimism that the Federal Reserve will remain in control of the markets even after tomorrow's announcement following the Fed's latest meeting. The U.S. market remains a pocket of strength amid less exuberant markets around the world, with rioting in Brazil marking the latest uprising among populations dissatisfied with the sluggish conditions in various economies across the globe.

Only a couple of stocks posted losses today. Merck fell 0.1% in light of a Supreme Court decision that gave the Federal Trade Commission the power to challenge arrangements between primary-drug developers and generic-drug manufacturers that involve upfront payments in exchange for delays in releasing generic versions of name-brand drugs. Clearly, Merck and its peers have incentives to keep brand-name profits going as long as possible, and FTC challenges could reduce their ability to do so going forward.

Microsoft also posted the narrowest of losses. Reports that the company will turn to Qualcomm to supply some chips for new versions of its Surface RT tablet were bad news for NVIDIA, which is the existing supplier for the Surface RT, but probably didn't move Microsoft's own stock substantially. In any event, the newer Surface Pro seems like a better prospect for Microsoft going forward, given its ability to run full versions of Windows 8 programs despite its heftier price tag.

Finally, outside the Dow, MannKind fell 12%, extending its losses from yesterday after completing its phase 3 trial of its Afrezza treatment for type 2 diabetes. MannKind's management couldn't identify any fundamental news affecting the stock, although later comments from CFO Matthew Pfeffer concerning whether the company might seek a partner before getting an approval decision on Afrezza from the FDA weren't sufficient to wipe out all of the stock's losses. The volatility highlights the danger of investing in small stocks with substantial speculative elements in their results.

Merck stumbled into 2013 and continues to battle patent expirations and pipeline problems. Is Merck still a solid dividend play, or should investors be looking elsewhere? In a new premium research report on Merck, the Fool tackles all of the company's moving parts, its major market opportunities, and reasons to both buy and sell. To find out more click here to claim your copy today.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends NVIDIA and owns shares of Microsoft and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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