Stock Commentary - New York week to May 4, 2009

NEW YORK: equities gyrated their way through the reporting week to May 5, leaving the Dow Jones with a hefty 5% rise overall, as investor  confidence increased. The market was helped by a strong banking sector  in the wake of government moves on "stress testing," ie, establishing  the strength of balance sheets. Pharmaceutical and biotechnology stocks  wee also mostly higher, with 23 of those tracked rising and 13 seeing a  decline. The public's positive perception of the drug industry has gone  up by five percentage points, according to a Harris Interactive poll,  all the way to 31% in the last year, its highest point in five years.  The sector now ranks above energy/utilities, airlines, insurance,  automotive, tobacco and financial services, with a spokesman for the  polling firm noting the industry is now beginning to get some credit for  changes in behavior, in how companies are thinking about reputation, as  well as communications.

Although a drop in revenue leading to a wider-than-expected  first-quarter loss, as well as analysts caution for the coming quarter,  helped drive Affymetrix shares down last week, they more than made up  this week, soaring 31.6%. The company has forecast second-quarter  revenue of $75.0-$78.0 million, and analysts are pegging the numbers to  come in at a close $76.6 million because of a spending slowdown for  many of the company's clients and higher costs. Ross Muken of Deutsche  Bank told clients that the firm's extended underperformance leads him  to believe that it will not have a quick turnaround. Despite Gilead  shares being off 5.5% for the reported week, the stock should see a  reversal in the coming weeks as it is a co-developer of Tamiflu  (oseltamivir). The US government has released a quarter of its  stockpiles of that drug and of GlaxoSmithKline's Relenza (zanamivir).  Ironically, the firm had recently said that first-quarter Tamiflu sales  fell because of global pandemic planning initiatives and noted a 29%  fall in royalties for the period from Roche. Alnylam and Isis are  collaborating on the development of single-stranded RNAi technology  which could see the former paying Isis up to $31.0 million in license  fees. However, investors seemed happy with the news of the deal, pushing  Alnylam's stock up 11.5%.