Companies featured in this edition of the newsletter: CBAI, CVM, FMTI, ICLK, ITUI, IWEB, PSTI, SVUL, URGP
Markets resumed their two month advance last week despite worldwide concern surrounding the outbreak of swine flu and concern from American investors regarding the results of bank stress tests due out at the end of this week. All told, the Dow managed to finish in positive territory, gaining 136 points to close at 8212, up 1.7% on the week, paring its YTD losses to 6.4%. The Nasdaq managed to post a 1.5% gain on the week, closing at 1719, up 9% on the year, while the S&P 500 and Russell 2000 posted gains of 1.3% and 1.7% respectively, bringing their YTD losses to 2.8% and 2.5%.
Swine flu stole most headlines this week as the potential for a worldwide pandemic weighed heavily on the minds of most. The news was greeted by weakness in the travel industry, especially airlines, hotels and cruise operators, but led to gains for drug makers as investors weighed the potential effects of a pandemic on the global economy. While the status of the outbreak is still below pandemic levels, there remains significant market moving potential should the sickness continue to spread.
The other big headline on the week came Friday, when a government source said that results from the bank stress test would come late afternoon on Thursday, May 7. Early speculation surrounding the tests indicated that regulators had told Bank of America and Citigroup that they may need to raise additional capital based on early results of the examinations.
There were also some notable economic developments on the week, as consumer confidence came storming back in April, crushing consensus estimates and suggesting that perhaps the recessionary pressures influencing consumer spending habits may finally be subsiding. It wasn’t all good news on the economic front however, as the advanced reading for Q1 GDP came in much weaker than expected (-6.1% vs. the expected -4.7%) due largely to a whopping 2.8% contraction in inventories.
What should investors look for this week? Keep a close eye on the announcement of results from the bank stress tests rumored to be released late Thursday, as they could have a significant impact on the financial sector and the market at large in turn.
Earnings slow down a bit but will still feature a number of notable releases. On Monday morning, expect reports from Sprint Nextel (NYSE: S), Sysco (NYSE:SYY), and Tyson Foods (NYSE: TSN). Tuesday morning look for results from Archer-Daniels (NYSE: ADM), CVS Caremark (NYSE:CVS) and Kraft Foods (NYSE: KFT) with Walt Disney (NYSE: DIS) reporting after the close. Beleaguered mortgage giant Fannie Mae (NYSE: FNM) reports Wednesday before the bell followed by Cisco Systems (NASDAQ: CSCO), News Corp (NYSE: NWS), Prudential (NYSE: PRU) and Sunoco (NYSE: SUN) after the close. Thursday morning American International (NYSE: AIG) reports along with DirecTV (NYSE: DTV) and General Motors (NYSE: GM) with Allstate (NYSE: ALL) and CBS Corp (NYSE: CBS) reporting after the close.
Economic data for the week begins with Construction Spending and Pending Home Sales for March due out together at 10:00am Monday, followed on Tuesday by ISM services for April at 10:00am. On Wednesday, expect ADP employment change data for March at 8:15am, followed by weekly crude inventories at 10:30am. Thursday look for weekly initial jobless claims, preliminary Q1 Productivity, and Q1 Unit Labor Costs all at 8:30am followed by March Consumer Credit figures at 3:00pm. The week finishes with Average Workweek, Hourly Earnings, Nonfarm Payrolls and the unemployment rate, all for April released together at 8:30am followed by Wholesale Inventories for March at 10:00am.
The conference schedule for the week kicks off on Monday with the Raymond James Oil Sands of Canada Conference being held in New York, while the two day AeA Micro Cap Financial Conference also begins on Monday in Monterey, CA. On Tuesday, Credit Suisse Group will hold their three day OTC Conference in Houston, with the Thomas Weisel/NASDAQ conference also beginning the same day in New York. The Bernstein Pharmaceutical Emerging Markets Conference begins on Wednesday in New York along with the New York Society of Security Analysts Manager Search and Selection Conference which begins on Thursday.
Volume Alert: Shares of vaccine developer Cel-Sci (AMEX: CVM) surged 63% on almost 6 times average volume last week before retreating, due to rising concerns surrounding the threat of a swine flu epidemic and new data suggesting that CVM’s portfolio of vaccines may be able to help combat the spread of such viruses. The company announced early last week that preclinical studies demonstrated that vaccines utilizing its proprietary L.E.A.P.S(Ligand Epitope Antigen Presentation System) vaccine technology could potentially induce protection against illnesses such as swine flu. The L.E.A.P.S. technology combines a small peptide that activates the immune system with a small peptide from a disease-related protein, such as a herpes simplex virus (HSV) glycoprotein, to make a vaccine that induces a defined immune response. Shares ended the week at $0.30, up three cents.
Nutraceutical developer Forbes Medi-Tech (NASDAQ: FMTI), announced last week that the company has received the final proceeds from a previously announced funding transaction. The Non-Dilutive Funding Transaction was originally announced on March 20, 2008, with the subsequent closing announced on May 12, 2008. With the receipt of these funds, the Non-Dilutive Funding Transaction has now been completed.Shares gained four cents on the week to close at $0.40.
Pluristem Therapeutics (NASDAQ: PSTI), a company engaged in developing regenerative therapies from stem cells derived from the placenta, announced last week that Dr. Frida Grynspan, Pluristem’s Vice President Research and Development, will present at the International Society for Cellular Therapy (ISCT), on “The pre-clinical path leading to the first-in-man clinical trial using PLX-PAD for the treatment of critical limb ischemia.” This is the ISCT 15th Annual Meeting and it will be held on May 3-6, 2009, at the Sheraton San Diego Hotel and Marina. Shares gained eighteen cents on the week to close at $1.52.
Cord Blood America, Inc. (OTCBB: CBAI), an umbilical cord blood stem cell preservation company focused on bringing the life saving potential of stem cells to families nationwide and internationally, received some encouraging news last week in the form of a piece of legislation introduced in Congress by Rep. Jackie Speier (D-CA.) that would require the Secretary of Health and Human Services to develop and disseminate educational materials on the value of storing umbilical cord blood stem cells at birth. The legislation requires a standard process for health care professionals to confirm that expectant parents have been informed about cord blood banking options available for their newborns and the derived cells’ role in successfully treating treat life-threatening cancers including leukemia and lymphoma, and the ongoing clinical research investigating the cells’ ability to treat disorders ranging from diabetes and heart disease to stroke and brain injuries. The company believes that raising awareness surrounding the lifesaving potential of its services on a mass scale as the legislation proposes will result in significant benefits to both the population at large and the company’s bottom line. Shares remained unchanged at less than a penny on the week.
Urigen Pharmaceuticals (OTCBB: URGP), a company specializing in the design and implementation of innovative products for patients with urological ailments, announced that it has entered into discussions with various pharmaceutical companies to license or engage in a joint venture for its two lead platforms, URG 101 and URG 301. The company is also considering mergers, acquisitions or investments from strategic partners in order to raise capital which would aid in bringing Urigen’s portfolio of therapies aimed at urinary conditions with significantly unmet medical needs to market. Shares remained unchanged at $0.08 on the week.
Standard & Poor’s announced last week that they have initiated coverage of interCLICK (OTCBB: ICLK), the fastest growing advertising network in the US according to comScore. S&P initiated coverage based on the fact that interCLICK has grown approximately twice as fast as any other U.S. online display advertising network in terms of audience reach over the last 18 months, according to comScore reports. As of December 2008, ICLK serves ads to 72% of all U.S. Internet users, reaching over 137 million unique users. Improved gross margins during the ’08 fiscal year due to improved supply chain management, in addition to its advanced proprietary technology platform enabling advertiser campaign performance improvements also helped attract coverage. The analyst report will be available to buy-side institutions and sell-side firms that utilize S&P research and information platforms daily, along with millions of self-directed investors who also have access to the report via their e-brokerage accounts. Shares gained a penny on the week to close at $0.84.
i2Telecom International, Inc. (OTCBB: ITUI), a developer of award-winning patented and innovative high-quality mobile applications and services, announced last week that it has executed a distribution agreement with Comstructure, a leader in international telecommunications management solutions, to bring the MyGlobalTalk mobile application and communications services to the enterprise market. Comstructure will market the enterprise version of MyGlobalTalk to its existing portfolio of corporate clients and will add the MyGlobalTalk service to its suite of telecommunication products and services that it markets through its proven channel of business partners, distributors, solution providers and independent agents. Shares lost a penny on the week to close at $0.07.
IceWeb (OTCBB: IWEB), a storage technology company specializing in Geographic Information Systems (GIS) that provides services to bureaucratic and corporate organizations, announced last week that it has launched its new Iplicity Version 1.4 storage management software suite containing all the functionality needed for configuring and managing INLINE Storage systems. IceWeb’s latest offering will enable users to manage the value-add enterprise capabilities integrated into the INLINE storage systems, including Multi-Level data protection, block-level mirroring and thin provisioning. The company believes that this newly released software package will allow it to expand its customer base, increase margins and make its software more useful for small to mid-sized companies requiring a flexible software system to accommodate expansion. Shares lost a penny and a half on the week to close at $0.075.
Steel Vault (OTCBB: SVUL) an emerging provider of identity security products and services, announced last week that its CEO, William Caragol appeared in an interview on the ABC news affiliate in West Palm Beach on Sunday, April 26, to discuss identity security. Mr. Caragol described how the company’s services, offered through its NationalCreditReport.com subsidiary, can help protect people of all ages from identity theft, including a number of tips on how to secure the identities of children. Shares lost two cents on the week to close at $0.35.
