Why the Dow Is Gaining Ground
Markets are enjoying a two-day pause in euro-negativity, and unsurprisingly gained ground in its absence. Although our recovery could certainly be better, the U.S. economy is nowhere near as bad as the eurozone's, and today's expectation-topping performances from the housing and manufacturing sectors reconfirmed that. Tomorrow brings a new initial claims report, GDP data, and most importantly the Supreme Court's decision on the health-care law, giving us a solid pulse on the domestic economy heading into the weekend before Independence Day.
That said, let's take a closer look at how the three major indexes are faring.
|Dow Jones Industrial Average (INDEX: ^DJI)||82.91||0.66%||12,617.58|
|S&P 500 (INDEX: ^GSPC)||10.60||0.80%||1,330.59|
Source: Yahoo! Finance as of 1:35 p.m.
The major U.S. indexes continue to add to yesterday's gains, with the Nasdaq once again showing the biggest move. The market's "fear index," the VIX, is essentially flat today, but if any of tomorrow's economic data disappoints, volatility could return in a big way. Oil reclaimed territory above $80 per barrel and natural gas has quietly climbed to $2.83 per million cubic feet, sending the energy sector up 2.1%. Yesterday's top-performing Dow components, Chevron and ExxonMobil, are both up an additional 1%. As the country's largest producer, Exxon could definitely use a rebound in natural gas prices.
Meanwhile on the Nasdaq, the biggest gainer is Arena Pharmaceuticals (NAS: ARNA) , up 35% after receiving approval for its obesity drug lorcaserin, which will be marketed as Belviq. Our country is facing an obesity crisis, so Belviq -- Arena's first approved drug and the first new obesity treatment in over a decade -- couldn't come at a better time. Competitor VIVUS (NAS: VVUS) climbed 8%; its drug Qnexa is up for approval next month. Orexigen Therapeutics (NAS: OREX) , currently running a pre-approval trial for its obesity drug Contrave, is soaring over 20%, as today shows the FDA has softened its stance on obesity drugs.
The next challenge for Arena will be bringing Belviq to market. But these are exciting times for the company and investors.
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