Another day, another new five-year high for the broad-based S&P 500, which caught flight on positive economic data and a flurry of strong earnings reports.
On the economic data front, China reported a 12.4% surge in exports in January, and Germany recorded its second-largest trade surplus in the past 60 years, signaling that both economic powerhouses may be in better shape than first thought. Domestically, a smaller U.S. trade deficit gave investors hope that U.S. goods are in high demand overseas.
For the day, the S&P 500 finished higher by 8.54 points (0.57%), to close at 1,517.93.
Microcontroller maker Microchip Technology Inc. (NASDAQ:MCHP), whose semiconductor products are used in touchscreen devices, was today’s biggest gainer within the S&P 500, advancing better than 7%, after reporting robust fourth-quarter results. Microcontroller sales spiked 22% during the quarter and accounted for 64% of Microchip’s total sales, as net income rose 14%, to $0.41. Microchip’s first-quarter sales and EPS forecast also handily trumped Wall Street’s expectations. As long as smartphone and tablet usage continues to rise, which seems to be a foregone conclusion, Microchip’s microcontroller demand should increase, and the company could have room yet to run even higher.
Global restaurant chain Yum! Brands, Inc. (NYSE:YUM) gained 2.7%, at the expense of McDonald’s Corporation (NYSE:MCD) pain. McDonald’s, earlier today, posted a worse-than-expected 1.9% drop in restaurant sales in January, and forecast near-term continued weakness. Yum!, which has been dealing with weak sales in Asia due to allegations of serving chicken with excess amounts of chemicals, is benefiting on the hope that McDonald’s weakness might be its chance to take market share – especially in fast-growing Asia. At 17.5 times forward earnings, I don’t share the same enthusiasm as investors, but I’m keeping Yum! on my watchlist, nonetheless.
Finally, biotech powerhouse Biogen Idec Inc. (NASDAQ:BIIB) advanced 2.6%, after receiving an upgrade from Citigroup Inc. (NYSE:C) to “buy” from “neutral,” and seeing its price target rise to $187 from $160. Earlier this week, Biogen agreed to pay Elan Corporation, plc (ADR) (NYSE:ELN) $3.25 billion for the full rights to multiple sclerosis drug Tysabri. Citi analyst Yaron Werber cited the expectation that Biogen will dominate the MS market, as well as the possible approval of Tecfidera, an all-oral MS drug, which could reach sales in excess of $4.2 billion by 2020 according to his estimates, as reasons for the upgrade. It’s really hard to argue against Werber’s analysis with Tysabri and Avonex providing such consistent gains for Biogen Idec already.
The article Today’s 3 Best Stocks originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of McDonald’s and Citigroup. Motley Fool newsletter services have recommended buying shares of LinkedIn and McDonald’s, as well as creating a bull call spread position in McDonald’s.
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