The stock market was in rally mode Wednesday after having its best day since the middle of March. All U.S. indices were up by midday, the Dow Jones Industrials in front of the pack, up nearly 1%. The S&P 500 and the Nasdaq were both up approximately 0.6%. Biotech and banks are proving to be the rally winners.
Shares of Sarepta Therapeutics (SRPT) rose substaintially after the Food and Drug Administration delayed the regulatory review of the Duchenne muscular dystrophy drug eteplirsen. The FDA has yet to comment on how much more time is needed. Just last month, an FDA advisory committee voted against recommending the drug. But shares jumped up more than 15% by midday in reaction to the news.
Meanwhile, an investigation by the Securities and Exchange Commission into Alibaba's (BABA) accounting practices caused shares to go down more than 3%. The SEC is looking into data reported from Singles Day, a Chinese online-sales holiday similar to Cyber Monday. Alibaba issued a statement saying it is unsure of when the investigation would conclude but it has given the agency documents and information regarding the reporting of the data.
Computer Sciences (CSC) shares were skyrocketing, up more than 34% by midday, following Hewlett Packard Enterprise's (HPE) spinoff announcement. The Virginia-based IT provider will merge with HP Enterprise's enterprise services. TheStreet's Jim Cramer says the deal valued at $8.5 billion is a "win-win for everybody." Computer Sciences' CEO Mike Lawrie will keep his position at the new company. According to Reuters, the merger is expected to produce cost synergies of about $1 billion in the first year.
Shares of Chesapeake Energy (CHK) climbed nearly 7% Wednesday, one day after the oil and natural gas liquids (NGLs) producer announced a debt-for-equity-swap. The swap aims to lower Chesapeake's near-term borrowings. Chesapeake agreed to issue roughly 5% of its outstanding shares in exchange for debt. This is the second swap of this kind for oil producer this month as it works to reduce its more than $9 billion in debt. Chesapeake is a memeber of Real Money's Stressed Out list of troubled companies. Chesapeake had previously swapped $153 million of debt for 4% of its equity. This comes as oil prices reached their highest level in seven months, nearing $50 a barrel for crude oil.
And, the banks are back. Citigroup (C) was up by more than 2% by midday despite being ordered to pay $425 million over attempted benchmark manipulation. But it is not just Citigroup on a roll, so is Bank of America (BAC), which also rose by more than 2%. Regarding this resurgence of the banks, Cramer says, "A bank rally based on nothing is a bank rally I believe in."
--Written by Anders Keitz