Volatility reached new levels this month as the European debt crisis unnerved investors. On May 6, the Dow Jones Industrial Average plummeted nearly 1,000 points intraday, and closed down 3.2%. International markets faced similar declines as France’s CAC-40 index tumbled 4.6%, Germany’s DAX fell 3.3%, Britain’s FTSE 100 dropped 2.6% and Japan’s Nikkei fell 3.1%. For the week ending May 7, the Dow, S&P 500 and NASDAQ tumbled 5.7%, 6.4% and 7.9%, respectively. However, on May 10, governments intervened to secure a $1 trillion fund to rescue debt-ridden European nations, leading global markets significantly higher. Despite the abrupt upturn, the markets continued the sell off, as first-quarter US GDP growth was revised downward on May 27 to 3.0% from initial estimates of 3.2%. For the month, the Dow, S&P 500 and NASDAQ fell 7.9%, 8.2% and 8.3%, respectively.

All IBO Stock Indexes traded lower in May. The Process/Metrology/Motion Instrumentation and Lab Consumables/Equipment Stock Indexes each slumped 8.0%, while the Diversified Instrumentation and Laboratory Instrumentation Stock Indexes declined 7.5% and 6.5%, respectively.

Laboratory Instrumentation Stock Index

For May, the Laboratory Instrumentation Index fell 6.5% to 557.61. Seventeen companies traded lower, and five companies improved. Symyx Technologies led the Index, climbing 17%. For the year, the Index is down 1.5%, despite 17 companies in positive territory and only five companies losing ground. X-Rite recorded the largest gain, up 58%. Helicos BioSciences declined the most for both the month and year, down 40% and 58%, respectively. Varian was removed from the Index following its acquisition by Agilent (see IBO 5/15/10).

Despite several positive earnings reports, most Index companies traded lower. Bio-Rad Laboratories reported EPS growth of 13% to $1.24 on May 4, $0.07 better than consensus, yet shares dropped 7.3% the next day. Transgenomic announced on May 5 a loss of $0.01 a share, compared to a loss of $0.02 last year. Shares declined 3.2% the following day. PerkinElmer, Sequenom and Dionex reported after the market closed on May 6. PerkinElmer announced EPS growth of 19% to $0.31, $0.03 ahead of expectations, and increased 2010 guidance by an average of 5% to $1.43–$1.48 a share. Shares slipped 3.4%. Sequenom reported a loss of $0.27 a share, $0.01 narrower than expectations, yet shares fell 15.4%. Dionex reported fiscal third-quarter EPS growth of 18% to $0.99, beating estimates by $0.08 a share. The company also raised its fiscal full-year EPS guidance by 2% to $3.24–$3.29. Shares dropped 2.6%. On May 17, Helicos reported a loss of $0.08 a share, compared to a loss of $0.10 a year ago. Shares fell 5.1%.

Several companies escaped earnings season unscathed. Luminex reported EPS of $0.05 on May 6, compared with a loss of $0.07 a year ago, in line with expectations. The company also reaffirmed its 2010 revenue outlook of $138–$148 million. Shares climbed 3.8% the following day. On the same day, MOCON reported EPS of $0.17, compared to $0.07 a year ago, leading shares up 1.0%. On May 12, X-Rite announced a loss of $0.03 a share, compared to a loss of $0.11 a year ago, leading shares up 4.5%. The only company to miss earnings expectations was Accelrys, which on May 20 reported a fiscal fourth-quarter loss of $0.09 a share, $0.01 wider than a year ago (see page 12). Full-year EPS was $0.04, compared to break even. Shares fell 1.7% the following day.

On May 12, Sequenom said it had raised $51.6 million through a private placement (see IBO 5/15/10), sending shares up 1.9%. On May 27, Symyx reported a revised bid for $6.75 a share from an unnamed competitor (see page 2), leading shares up 7.3%. GARP Research initiated coverage of Cepheid on May 21 with a “Buy” rating. On May 26, Morgan Joseph initiated coverage of Beckman Coulter with a “Buy” rating.

Process/Metrology/Motion Instrumentation Stock Index

For the month, the Process/Metrology/Motion Instrumentation Stock Index declined 8.0% to 356.49, with seven companies in negative territory and Nanometrics up 1%. Zygo led the Index lower, falling 15%. Year to date, the Index has lost 3.3%, with half of the companies gaining ground and the other half trading lower. SDIX gained the most ground, up 24%, while ICx Technologies and RAE Systems have each lost 30%.

SDIX announced on May 3 a loss of $0.02 a share, compared to a loss of $0.03 a year ago, yet shares slumped 11.4% the following day. On May 4, Zygo announced fiscal third-quarter EPS of $0.04, compared to a loss of $0.34 a share last year. Shares fell 2.4% the following day. RAE reported a loss of $0.01 a share on May 5, $0.01 narrower than consensus, but projected a small net loss for 2010. Shares tumbled 11.1% the following day. Nanometrics reported EPS of $0.28 (see page 12), $0.17 ahead of consensus, leading shares up 2.4% the following day. MTS Systems reported fiscal second-quarter EPS of $0.37 on May 6, $0.04 better than consensus. Shares were unchanged. On May 13, ICx announced a loss of $0.03, $0.04 narrower than predicted. Shares slipped 1.9% the following day. FEI missed EPS expectations by $0.04 on May 4, reporting a 5% decline in first-quarter EPS to $0.18, and projecting second-quarter EPS of $0.18–$0.23. Shares declined 3.8% the next day.

Lab Consumables/Equipment Stock Index

The Laboratory Consumables/Equipment Stock Index dropped 8.0% in May to 521.19. Seven companies declined, led by Enzo Biochem, which fell 11%, while Millipore was marginally higher. For the year, the Index has improved 4.0%, with six companies trading lower and two companies gaining ground. Millipore has improved the most, climbing 47%, while Kewaunee Scientific is down 16%.

QIAGEN reported EPS of $0.20 on May 3, $0.01 better than consensus and reaffirmed its full-year EPS outlook of $0.90–$0.96. Shares fell 3.5% the following day. Techne reported fiscal third-quarter EPS of $0.75 on May 4, $0.04 ahead of expectations. Shares declined 2.6%. Millipore announced EPS growth of 26% to $1.06 on May 6, in line with expectations. Shares were unchanged.

Diversified Instrumentation Stock Index

The Diversified Instrumentation Stock Index contracted 7.5% for the month to 107.57, with all six companies trading lower. Agilent Technologies sustained the largest decline, falling 11%. Year to date, the Index has gained 5.8%, with all companies in positive territory. Roper Industries leads the Index, having gained 11%.

Danaher announced on May 12 a share repurchase plan of up to 10 million shares and a two-for-one stock split payable on June 11 for shareholders of record on May 25. Shares jumped 3.8%. Agilent completed the acquisition of Varian on May 14, leading shares up 1.0% the following business day. The company reported fiscal second-quarter earnings growth of over 200% to $0.43 a share on May 17 (see page 12), $0.02 ahead of expectations, and raised its 2010 EPS guidance by 3% to $1.70–$1.75. The company projected fiscal third-quarter EPS of $0.43–$0.45, yet shares fell 6.2% the following day. On May 24, Fitch Ratings raised its outlook for Agilent to “Positive” from “Stable.” Shares traded marginally higher.

International

This month, all five Pacific Region firms traded lower. Techomp lost the most, falling 52%. For the year, three companies are up, while Hitachi High-Technologies and JEOL are down 6% and 2%, respectively. Horiba has improved the most, gaining 12%. On May 10, Horiba reported first-quarter EPS of ¥32.71 ($0.36), compared to ¥22.88 ($0.24) last year, leading shares up 3.3% the following trading day.

In May, 10 European companies improved, and four traded lower. Exiqon sustained the sharpest decline, falling 20%, while Alpha MOS gained 8%. For the year, 10 firms are up, three have declined and Exiqon is trading flat. Biohit leads for the year, having gained 73%, while Tecan is down 13%. On May 12, Analytik Jena reported fiscal second-quarter EPS of €0.16 ($0.29), compared to €0.22 ($0.29) last year. Exiqon reported a first-quarter loss of DKK 0.37 ($0.07) on May 18, compared to loss of DKK 0.84 ($0.15) a year ago (see page 12), leading shares up 8.4% the following day.

Chart: IBO Instrument Industry Stock Index

Lab Instrument Stock Index S&P 500

May-08 622.99 335.75

Jun-08 602.24 306.89

Jul-08 639.07 303.86

Aug-08 643.46 307.57

Sep-08 590.45 279.64

Oct-08 456.82 232.26

Nov-08 416.63 214.88

Dec-08 390.29 216.56

Jan-09 397.41 198.01

Feb-09 376.99 176.24

Mar-09 393.81 191.29

Apr-09 428.75 209.26

May-09 446.23 220.37

Jun-09 479.85 220.41

Jul-09 522.15 236.75

Aug-09 528.47 244.70

Sep-09 543.19 253.44

Oct-09 535.42 248.43

Nov-09 548.41 262.68

Dec-09 565.94 267.35

Jan-10 546.93 257.47

Feb-10 566.22 264.81

Mar-10 585.87 280.38

Apr-10 596.47 284.51

May-10 557.61 261.19