There were a number of changes to this month’s IBO stock table. A new stock index was created, the Diversified Instrumentation Stock Index, which consists of six large companies (Agilent Technologies, AMETEK, Danaher, Mettler-Toledo International, Roper Industries and Teledyne Technologies) that manufacture a wide variety of products, including analytical and life science instruments. Other changes include the removal of Ciphergen Biosystems from the Laboratory Instrumentation Index due to the sale of its instrument business to Bio-Rad Laboratories (see IBO 8/15/06). Also, Roper and X-Rite were removed from the Process/Metrology/Motion Instrumentation Index. X-Rite joined the Lab Instrumentation Index and Roper joined the new index. In addition, Symyx Technologies was added to the Lab Instrumentation Index. In January, crude oil prices continued to play a key role in the fluctuating US indexes, falling over 18% to just below $50 per barrel for the first time in 19 months on January 17 due to mild weather in the Northeast and unexpected inventory increases. However, prices rebounded over the last half of the month due to forecasts of colder weather in the Northeast and expectations of an OPEC supply cut on February 1. Crude oil prices finished the month just below $56 per barrel. On January 17, the Labor Department reported a 0.9% gain in the December Producer Price Index, well above the forecast of a 0.5% gain. However, the “core” Producer Price Index advanced 0.2%, just slightly above the forecasted 0.1%. The news relieved inflation fears and led the Federal Reserve, on January 31, to maintain interest rates at 5.25% for the fifth straight meeting. This good news kept the US indexes on track. For the first month of 2006, the Dow Jones Industrial Average inched up 1.3% to 12,621.69, the S&P 500 gained 1.4% to close at 1,438.24 and the tech-heavy NASDAQ improved 2.0% to 2,463.93. In January, the Laboratory Instrumentation Stock Index outpaced the other three IBO Indexes, climbing 4.6%. The Lab Consumables/Equipment and Process/Metrology/Motion Instrumentation Indexes also performed well, gaining 3.1% and 2.9%, respectively. However, the new Diversified Instrumentation Index slipped 0.7%. Laboratory Instrumentation Stock Index This month, the Laboratory Instrumentation Stock Index gained 4.6% to close at 564.40, with 13 companies improving, 9 declining and Luminex unchanged. Molecular Devices led the Index this month, jumping 67% due to a 47% gain on January 29 when MDS Sciex agreed to acquire the company (see page 2). Transgenomic also performed well this month, climbing 61%. The two new additions to the Index were the worst performers, as Symyx Technologies dropped 10% and X-Rite lost 9%. During the month, Matrix Research upgrades shares of Molecular Devices to a “Hold” rating, leading shares to rise 3.4% on January 24. UBS upgraded shares of PerkinElmer to a “Buy” rating on January 16, causing shares to improve 2.2%. Cepheid gained 3.6% on January 11 after the company announced a patent infringement settlement with Idaho Technology. Transgenomic announced the resignation of chairman and co-founder Collin D’Silva on January 22, leading shares to drop 5.6%. OI dropped 6.4% on January 23 after the company announced it would review its historical stock option grants and placed president and CEO William Botts on leave (see page 2). X-Rite announced on January 8 that it was suspending its quarterly dividend of $0.025 per share. The company stated that its financial priority was to reduce debt and focus on product and market initiatives. Many calendar year-end financial reports were released this month. However, early forecasts began on January 8 when Affymetrix announced anticipated fourth quarter revenues of approximately $100 million, ahead of analysts’ estimates of $99.5 million, causing shares to jump 13.6%. Varian rose 11.2% on January 25 after the company reported fiscal first quarter earnings of $0.49 per share on revenues of $217.9 million (see page 12), beating analysts’ estimates of $0.48 per share and $207.9 million in revenues. The strong results led Robert W. Baird to upgrade shares to an “Outperform” rating. On January 24, Waters reported fourth quarter earnings of $0.84 per share and revenues of $386.9 million (see page 12), topping analysts’ estimates of $0.79 per share and sales of $361.7 million, leading shares to gain 2.9%. Process/Metrology/Motion Instrumentation Stock Index The Process/Metrology/Motion Instrumentation Stock Index improved 2.9% in January to close at 439.76. Five of the seven companies reported share price gains, with Zygo dropping 7% and FEI slipping 5%. RAE Systems and MTS Systems led the way, climbing 14% and 11%, respectively. CE Unterberg Towbin upgraded shares of RAE Systems to a “Buy” rating on January 25, leading shares to improve 3.8%. Strategic Diagnostics jumped 8.1% on January 23 after the company announced the sale of two of its Salmonella test platforms to three major food processors for combined annual revenues of $800,000 per year. After the bell on January 24, MTS Systems reported first quarter earnings of $0.54 per share, well above analysts’ expectations of $0.47, causing shares to rise 4.1% on the following day. Zygo dropped 4.8% on January 26, a day after it reported flat fiscal second quarter earnings (see page 12). Lab Consumables/Equipment Stock Index The Laboratory Consumables/Equipment Stock Index moderately rose 3.1% to 393.59 this month, with six companies gaining in share price and four showing losses. QIAGEN and Kewaunee Scientific led the way, climbing 14% and 13%, respectively, and were the only double-digit gainers in the Index. Cambrex was the worst-performing company, slipping 4%. On January 5, UBS downgraded shares of Pall to a “Neutral” rating, while Credit Suisse upgraded shares of QIAGEN to a “Neutral” rating. Pall dropped 2.7% on the news, while QIAGEN was unaffected. On January 11, Pall announced a $0.01 per share increase to its quarterly dividend of $0.11 per share. Robert W. Baird upgraded shares of Stratagene to a “Neutral” rating on January 30. Finally, Techne reported fiscal second quarter earnings of $0.47 per share (see page 12), which fell a penny short of expectations. The announcement led shares to slip 1.7% and caused First Analysis Securities to downgrade shares to a rating of “Equal-Weight.” Diversified Instrumentation Stock Index In its first appearance as part of the IBO stock table, the Diversified Instrumentation Stock Index dropped a minimal 0.7% to 99.33, primarily due to an 8% drop in heavily weighted Agilent Technologies. This month, four of the six Index companies gained in share price, while only Agilent and Teledyne Technologies declined. AMETEK led the Index, climbing 9%. On January 24, Janney Montgomery Scott downgraded shares of Danaher to a “Neutral” rating and two days later William Blair downgraded shares to a “Market Perform” rating. The announcements led the company to drop 4.0% over the final week of the month. Teledyne reported strong fourth quarter earnings on January 25 (see page 12), but forecasted first quarter earnings of $0.47–$0.51 per share, below analysts’ expectations of $0.53, leading shares to drop 3.6%. International Shares JEOL and Hitachi High-Technologies were the only Pacific Region companies in the positive this month, gaining 5% and 2%, respectively. The weakest performer, Techcomp, dropped 5%. Of the 14 European companies IBO follows, eight showed gains, five declined and Spectris was unchanged. Of the eight gainers, five showed double-digit increases. Biohit was the largest gainer, climbing 40%, followed by a 37% gain for Genetix and a 27% jump for Alpha MOS .Cybio was the worst performing international company, dropping 8%. Renishaw dropped 14.4% after it reported a 12% drop in half-year earnings on January 24. Whatman’s shares dropped 4.9% on January 18 after the company reported it would be replacing its CEO (see page 2). Biohit’s shares closed 12.4% higher on January 26, the day it announced it was investigating the possibility of spinning off its diagnostics business. Shares of Robotic Technology Systems rose 10.5% on January 24, a day after it announced that it expects 2006 pre-tax results to meet its forecast.