Why El Paso Electric, Nektar Therapeutics, and Hecla Mining Jumped Today
Monday was another volatile day for the stock market, as investors once again expressed doubt about the prospects for a favorable resolution to trade tensions between the U.S. and key international partners. Today's nervousness was caused by China, which argued that the U.S. is solely responsible for the setbacks in that particular bilateral trade relationship over the past week. Problems in the technology sector also weighed on the Nasdaq in particular, but some stocks managed to post solid gains. El Paso Electric (NYSE: EE), Nektar Therapeutics (NASDAQ: NKTR), and Hecla Mining (NYSE: HL) were among the top performers. Here's why they did so well.
El Paso Electric lights up
Shares of El Paso Electric were higher by 13.5% after the utility company received a buyout bid. An infrastructure investment fund managed by JPMorgan Chase's investment management division entered into an agreement to buy El Paso Electric for $4.3 billion. Under the terms of the deal, shareholders will receive $68.25 in cash for every El Paso share they own. El Paso CEO Mary Kipp said that the deal "values local job retention and growth, creating a sustainable path to enhance our renewable energy resources and protecting the environment" and respecting both customers and employees. Some investors have seen El Paso Electric as cheap for some time, making JPMorgan's bid a smart and opportunistic move.
Nektar hopes for a cure
Nektar Therapeutics saw its stock rise 9% following the release of clinical data from a phase 2 study of its bempegaldesleukin treatment. Nektar said that the study, which includes stage IV melanoma patients, saw a 34% rate of complete response at 12 months when bempegaldesleukin was combined with chemotherapy drug Opdivo. Within the study, 42% of patients saw a 100% drop in target lesions. Those numbers were favorable compared to alternatives evaluated without the Nektar candidate treatment. Nektar hopes that the study will continue to go well and eventually lead to late-stage clinical trials to seek approval of the drug, and investors seem to have equally high expectations after today's gains.
Hecla shines brighter
Finally, shares of Hecla Mining picked up 12%. The hard-hit silver miner finally got some good news from the bullion market today, where silver prices were higher by roughly $0.20 to $14.75 per ounce. Favorable commodity markets are especially important for companies like Hecla that have relatively high levels of debt on their balance sheet because they can help make it easier to meet interest payments and refinance their outstanding obligations in a timely manner. Hecla still has plenty of challenges operationally to overcome, including recent asset impairments. In order to build on today's momentum, Hecla will have to keep improving its own business operations, hopefully bolstered by favorable moves in silver prices.
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