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Why Teva Pharmaceutical Industries, Mesoblast, and New Gold Jumped Today

Dan Caplinger, The Motley Fool

The stock market lost ground on Tuesday, as investors responded negatively to remarks about the prospects for economic weakening. Fed Chair Jerome Powell gave a speech that included comments about the likely course of monetary policy, and he noted that a "backdrop of heightened uncertainties" could be a wild card even with generally favorable conditions at present. Even though major indexes fell, some stocks posted strong gains. Teva Pharmaceutical Industries (NYSE: TEVA), Mesoblast (NASDAQ: MESO), and New Gold (NYSEMKT: NGD) were among the top performers. Here's why they did so well.

Teva gets its deal done

Shares of Teva Pharmaceutical Industries picked up 7% after the generic-drug specialist received court approval to move forward with a settlement proposal. Teva had offered to resolve a dispute with the Oklahoma attorney general involving allegations about the pharma company's role in the U.S. opioid epidemic, with parties having agreed in late May to an $85 million payment into a fund with the state treasury for use in opioid-related expenses. Late yesterday, an Oklahoma state court approved the settlement as revised, and Teva shareholders hope that the company won't have to deal with more litigation about the issue.

Signpost with Teva logo on it, next to a fence.

Image source: Teva Pharmaceutical Industries.

Mesoblast keeps gaining ground

Mesoblast saw its stock climb 12%, following up on gains made yesterday. The Australia-based company had said early Monday that its rexlemestrocel-L candidate treatment for the prevention of post-implantation mucosal bleeding in end-stage chronic heart failure patients requiring a left ventricular assist device had gotten the orphan drug designation from the U.S. Food and Drug Administration. That designation will potentially provide Mesoblast with additional incentives, including market exclusivity upon approval, fee exemptions, tax credits, and other assistance. Mesoblast expects to meet with the FDA to come up with an approval pathway to accelerate release, and investors are warming up to the idea that the drugmaker could be putting itself in position to take advantage of a lucrative niche market.

New Gold shines

Finally, shares of New Gold jumped 11%. The gold miner benefited from a strong day in the precious metals markets, as gold bullion prices climbed almost $20 per ounce to nearly $1,440 during the morning hours before pulling back slightly. Gold has performed quite well recently due to concerns about the global economic situation, and investors are hopeful that higher prices will finally put small producers like New Gold in a better position to improve their balance sheets and boost their profits. New Gold in particular needs help from the yellow metal, as its costs are generally well above those of rivals. Going forward, the company will want to see both strong gold markets and good results from its mining assets in order to drive its stock higher.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.