What Happened?

A number of stocks jumped in the afternoon session after a new trade agreement between the United States and Japan spurred a broad market rally. 

The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Drug Development Inputs & Services company Fortrea (NASDAQ: FTRE) jumped 6.5%. Is now the time to buy Fortrea? Access our full analysis report here, it’s free.
• Drug Development Inputs & Services company Azenta (NASDAQ: AZTA) jumped 5.1%. Is now the time to buy Azenta? Access our full analysis report here, it’s free.
• Research Tools & Consumables company Bio-Techne (NASDAQ: TECH) jumped 4.2%. Is now the time to buy Bio-Techne? Access our full analysis report here, it’s free.
• Genomics & Sequencing company 10x Genomics (NASDAQ: TXG) jumped 5.3%. Is now the time to buy 10x Genomics? Access our full analysis report here, it’s free.
• Generic Pharmaceuticals company Amphastar Pharmaceuticals (NASDAQ: AMPH) jumped 5.5%. Is now the time to buy Amphastar Pharmaceuticals? Access our full analysis report here, it’s free.

Zooming In On Fortrea (FTRE)

Fortrea’s shares are extremely volatile and have had 54 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 1 day ago when the stock gained 24.1% as positive earnings reports from industry peers lifted the entire contract research organization sector. 

The rally was sparked by strong second-quarter results from two major players in the space, IQVIA and Medpace, which both reported earnings and revenue that beat analyst expectations. Medpace, in particular, surged after significantly raising its full-year guidance for revenue and earnings. This wave of good news from competitors boosted investor confidence across the sector, leading to gains for other contract research organizations (CROs) like Fortrea. A CRO provides outsourced research and development services to the pharmaceutical and biotechnology industries. 

Fortrea is down 66.7% since the beginning of the year, and at $6.21 per share, it is trading 77.7% below its 52-week high of $27.88 from July 2024. Investors who bought $1,000 worth of Fortrea’s shares at the IPO in June 2023 would now be looking at an investment worth $206.15.

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