- Government spending was a key topic on Wall Street Monday, as investors kept a close eye on the progress of two infrastructure bills making their way through Congress. Alternative energy stocks benefitted from the prospect of more cash flowing out of Washington, with Fuelcell Energy (NASDAQ:FCEL), Hyzon Motors (NASDAQ:HYZN), QuantumScape (NYSE:QS) and Plug Power (NASDAQ:PLUG) all posting notable advances.
- Victoria's Secret (NYSE:VSCO) was another substantial gainer on the session, continuing the momentum it has seen since becoming a standalone company.
- Moderna (NASDAQ:MRNA) had a good day as well, reaching yet another new high on growing prospects that a booster COVID vaccine will be necessary for some people.
- Meanwhile, regulatory concerns weighed on a pair of experimental drug makers on Monday. Axsome Therapeutics (NASDAQ:AXSM) and Eton Pharmaceuticals (NASDAQ:ETON) both ran into delays in their progress toward approval from the Food and Drug Administration.
Sector In Focus
- Two giant infrastructure bills are currently winding their way through Washington. The first comes in the form of a $1T bipartisan bill, focused on traditional infrastructure, like roads and bridges. The second represents a more controversial Democrat-backed $3.5T measure aimed at so-called "human infrastructure."
- As the smaller, bipartisan measure moves closer to Senate approval, Monday saw the release of further details of the more expansive Democratic bill. This included a significant investment in green energy, along with money for child care, education and other programs.
- The promise of additional government spending sparked a rally in the alternative energy sector on Monday. FCEL rose about 14%, while HYZN climbed 15%. Both QS and PLUG both posted advances of nearly 9%.
Standout Gainer
- Victoria's Secret (VSCO) began trading last week after the well-known underwear and casual clothing brand split off from Bath & Body Works (NYSE:BBWI). So far, that separation has paid off.
- VSCO jumped immediately after becoming a standalone publicly traded company. That momentum has continued in the early stages of this week, with the stock jumping 20% on Monday's session.
- The latest advance was inspired by a positive analyst note. J.P. Morgan issued an Overweight rating on the stock and set a December 2022 price target of $100.
- VSCO gained $11.57 on Monday to close at $69.24. The stock began trading last week with an initial reference price of $45.99. Shares are now up about 51% from that level.
- If the stock were to reach J.P. Morgan's $100 price target, that would represent another 44% rally from its current level.
Standout Loser
- Axsome Therapeutics (AXSM) ran into a major snag with its development of a product called AXS-05. The company disclosed that the FDA has identified "deficiencies" with its application for regulatory approval.
- The news came the same day AXSM announced positive data from a recent mid-stage trial. It said AXS-05 met the primary and key secondary endpoints in a phase 2 study in depression patients.
- The process of addressing the FDA's deficiencies with the AXS-05 application suggests a likely delay in potential approval for the treatment.
- As such, AXSM dropped nearly 47% on Monday to close at $27.37. With the slide, the stock reached its lowest level since November of 2019.
Notable New Low
- Eton Pharmaceuticals (ETON) suffered a similar fate on Monday. Like AXSM, the delay of FDA approval sparked a sell-off in shares of the drug maker.
- The company revealed that the FDA action data for its topiramate oral solution has been pushed off until November. Approval of the product would trigger a $5M royalty payment from Azurity Pharmaceuticals.
- ETON fell nearly 18% on the session, closing the day at $4.82. Shares also reached a new 52-week low of $4.78.
Notable New High
- COVID vaccine maker Moderna (MRNA) got a boost on Monday as authorities around the world continue to discuss a possible booster shot for coronavirus.
- Over the weekend, Dr. Anthony Fauci expressed support for a third dose of COVID vaccines for vulnerable populations. Meanwhile, Israel is considering approving a COVID booster for people as young as 40.
- On the news, MRNA jumped about 17% on the session, its biggest single-day advance since last November. During Monday's trading, the stock also set a new 52-week high of $493.76. It finished off that mark at $484.47.
- MRNA has now doubled in value in the past month. The stock has also advanced more than 570% compared to the same time last year.
- To follow big movers during the session, check out SA's dynamic On The Move section.