Axalta Soars 17% in Crazy Day

Today was a very unusual and highly dramatic day for the stock market. The S&P 500 gained 0.81% to close at an all-time high of 2,581.07. However, a very large portion of those gains were driven by a very small group of stocks.

Consider that the median stock in the S&P 500 gained just 0.10%. Less than 30% of the stocks in the index outperformed the index today. The Dow only gained 0.14%. That’s an unusually wide spread between the two indexes.

The equally-weighted ETF rose just 0.16% today.

The big winners were largely focused on mega-cap tech stocks.

Amazon gained 13.2%.
Microsoft gained 6.4%.
Facebook gained 4.2%.
Apple gained 3.6%.
Google gained 4.8%.
Intel rose 7.4%.

The S&P 500 Tech Sector ETF rose 2.69%, while nine of the other ten sectors lagged the market. The S&P 500 Value Index lost 0.13% while the tech-heavy S&P 500 Growth gained 1.55%.

The S&P 100 gained 1.12% and the Nasdaq Composite rose 2.20%.

Amazon added $61 billion in market value. That’s more than the market value of 400 stocks in the S&P 500. Jeff Bezos is now the richest man in the world with a fortune of $90 billion. He made close to $7 billion today.

Now let’s look at our Buy List today. The good news is that we gained 1.04% and beat the overall market, but 17 of our 25 stocks lost to the S&P 500 today.

The bad news was Cerner, which we knew was going to happen. CERN dropped 8.4% on the day. At one point, it was down nearly 12%.

Fortunately, we have one of the big tech stocks in the form of Microsoft. Thanks to the good earnings report, the software giant jumped 6.4% today. At one point, MSFT was up over 9.4%.

The strong report from Stryker helped that stock jump 7.4% today.

Express Scripts rose 5.5% on the news that CVS is bidding to buy Aetna for $66 billion. Maybe someone will bid for them.

That brings us to the biggest news of the day. Akzo Nobel, a Dutch company, said that it has approached Axalta about a merger offer.

Let me be clear that there’s no deal. They’re just talking.

Shares of AXTA exploded higher.

In March, PPG tried to buy Akzo but the company said no. At the time, I thought PPG might then go after Axalta. Now we know it was Akzo that was interested.

During the day Axalta soared as much as 21% before closing up 17% on the day.

What a crazy day!

Posted by on October 27th, 2017 at 7:07 pm

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.