The US equity markets fluctuated in February due to mixed economic data, interest rate hike fears and global debt worries. On February 4, a climb in initial jobless benefits and concerns over European nations’ ability to finance debt led the Dow Jones Industrial Average, S&P 500 and NASDAQ down 2.6%, 3.1% and 3.0%, respectively. Negotiations for Greece’s debt crisis prompted stocks higher. For the three days ending February 11, the Dow, S&P 500 and NASDAQ jumped 2.4%, 2.1% and 2.4%, respectively. Most declining economic leading indicators were overshadowed by positive economic reports. Meanwhile, on February 18, the Federal Reserve increased the discount rate by 25 basis points to 0.75% and on February 24, the Bureau of Economic Analysis revised its fourth quarter real GDP estimate to an annualized rate of 5.9% from 5.7%. The Dow, S&P 500 and NASDAQ ended the month up 2.6%, 2.9% and 4.2%, respectively. For the year, the Dow, S&P 500 and NASDAQ are down 1.0%, 1.0% and 1.4%, respectively.

For the month, all of the IBO Stock Indexes recorded strong gains. The Lab Consumables/Equipment, Diversified Instrumentation, Process/Metrology/Motion Instrumentation and Laboratory Instrumentation Stock Indexes climbed 7.6%, 6.4%, 3.8% and 3.5%, respectively.

Laboratory Instrumentation Stock Index

In February, the Laboratory Instrumentation Index grew 3.5% to close at 566.22. Three companies declined and 21 improved. For the year, the Index is up 0.1%, with 15 companies trading higher and nine in negative territory. Sequenom led the Index for both the month and year, improving 62% and 57%, respectively. Symyx Technologies fell 12% and 21% for the month and year, respectively.

Stock prices for Index companies were mixed despite positive earnings results. Thermo Fisher Scientific reported EPS of $0.91 on February 3, $0.03 above consensus, projecting full-year EPS growth of 8%–10% to $3.30–$3.45 and meeting expectations. Shares grew 1.7%. On February 1, the company agreed to purchase Finnzymes, a provider of high-performance PCR solutions, leading shares up 1.4% the following day. On February 22, following a rumored $6 billion bid for Millipore (see page 12), Thermo fell 2.3%. Accelrys, Affymetrix, Illumina, PerkinElmer and Luminex all posted better-than-expected EPS on February 4. Accelrys announced fiscal third-quarter EPS of $0.08, $0.03 ahead of consensus, sending shares up 5.0% the following day. Affymetrix reported EPS of $0.04, well above expectations for a loss of $0.10 a share, leading shares up 28.7% the following day. Illumina reported EPS of $0.21, $0.01 better than expectations, and maintained its 2010 EPS guidance of $0.90–$1.00, yet shares fell 3.1% the following day. Luminex reported EPS of $0.12, $0.05 better than consensus, and projected 2010 revenue growth of 14%–23% to $138–$148 million. Shares fell 3.3% the following day. PerkinElmer reported EPS of $0.43, $0.02 ahead of expectations, and forecasted 2010 EPS of $1.35–$1.42. Shares grew 3.5% the following day. On February 16 the company launched a new health screening laboratory in India for fetal, maternal and neonatal testing. Shares rose 2.8%. On February 9, Dionex announced fiscal second-quarter EPS of $0.92, $0.04 better than expectations, and raised its full-year EPS by 2% to $3.15–$3.23. Yet shares traded slightly lower. Bio-Rad (see page 12) reported EPS of $1.49 on February 24, $0.39 better than expectations, and projected 2010 organic revenue growth of 5%. However, shares fell 3.3% the following day. On the same day, Transgenomic reported breakeven EPS, similar to a year ago. Shares grew 2.9%. Harvard Bioscience reported EPS of $0.10 on February 25, unchanged from a year ago. The company projected first-quarter and full-year EPS of $0.08-$0.09 and $0.36-$0.38, respectively. Shares jumped 7.4% the following day. On the same day, SDIX announced breakeven EPS, compared to a $0.62 loss a share last year, sending shares up 1.8% the following day. Bruker announced EPS of $0.27 on February 26, $0.07 ahead of consensus, and estimated 2010 growth above 5%, excluding currency. Shares fell 2.9% the following day.

Varian and Symyx Technologies were the only two companies to miss EPS expectations. Varian announced fiscal first-quarter EPS of $0.14 on February 8, $0.08 below estimates. However, shares traded only marginally lower as investors await the completed acquisition by Agilent Technologies. Symyx reported EPS of $0.06 on February 11, $0.02 below estimates, sending shares down 6.7% the following day. For 2010, the company forecasted EPS of $0.06–$0.14, excluding the pending HPR divestiture.

In other news, on February 4, Sequenom launched its SeniGene Rhesus D genotyping test, leading shares up 3.7%. On February 9, the company reported a licensing agreement to develop a genetic test for age-related macular degeneration. Shares rose 2.2%. On February 16, Sequenom launched its SensiGene Fetal sex determination test. Shares rose 16.4%. On same day, Waters introduced its Viridis Supercritical Fluid Chromatography columns for compound purification. Shares rose 1.1%. On February 24, MOCON’s quarterly dividend rose 6% to nine and one-half cents. Shares finished modestly lower.

On February 4, JP Morgan upgraded Affymetrix to “Neutral” from “Underweight.” Robert W. Baird upgraded PerkinElmer on February 5 to “Outperform” from “Neutral.” Jefferies & Company initiated coverage of both Waters and Bruker on February 12 with a “Hold” rating.

Process/Metrology/Motion Instrumentation Stock Index

The Process/Metrology/Motion Instrumentation Stock Index gained 3.8% to 343.68 this month. Six companies improved and two lost ground. SDIX, the leader, climbed 14%, while Zygo fell 7%. Year to date, the Index is down 6.7%, with five companies in negative territory and three with positive returns. Zygo maintains the largest price increase, with a return of 46%, while ICx Technologies is down 32%.

Zygo’s fiscal second-quarter loss of $0.07 a share on February 4 was $0.05 narrower than consensus. Shares traded marginally higher. Veeco reported fourth-quarter EPS of $0.41 on February 8, $0.08 better than expectations, and projected first-quarter EPS of $0.41–$0.50. Shares rose 9.3%. FEI Company announced EPS of $0.19 on February 3, $0.04 short of expectations, and shares fell 8.5% the following day. The company expects first-quarter EPS of $0.15–$0.20. The next day, MTS announced fiscal-first quarter EPS of $0.23, $0.03 below consensus, leading shares down 1.6%. On February 16, FEI’s board of directors rejected the $10 per share unsolicited offer made by II-VI. Shares fell 9.3%. Nanometrics missed EPS estimated by $0.04 on February 18, reporting a loss of $0.01 a share and leading shares down 7.4%.

Other events this month included the name change for Strategic Diagnostics to SDIX on February 11. Benchmark initiated coverage of ICx Technologies on February 17 with a “Buy” rating. On February 23, ICx was awarded a $9 million contract for mobile integrated surveillance systems. Shares traded marginally higher the following day.

Lab Consumables/Equipment Stock Index

The Laboratory Consumables/Equipment Stock Index rose 7.6% in February to 514.28. Five companies gained ground and three traded lower. Millipore led the Index, soaring 37%, while Kewaunee Scientific fell 3%. Year to date, the Index is up 2.6%. Two companies improved and six declined. Millipore gained the most, up 30%, while Techne is down 7%.

Techne was the only Index company to miss earnings expectations. The company reported fiscal second-quarter EPS of $0.66 on February 2, $0.02 below consensus, leading shares down 0.7%. QIAGEN reported EPS of $0.24 on February 8, $0.02 ahead of expectations and forecasted 2010 EPS of $0.90–$0.96. Shares traded marginally lower. On the same day, Millipore beat EPS expectations by $0.06 as the company recorded fourth-quarter earnings of $1.00 a share. The company projected 2010 EPS of $4.35–$4.45, yet shares fell 2.5%. On February 22, the company rose 22.4% due to rumors of an unsolicited bid from Thermo. On February 10, Sigma-Aldrich announced EPS of $0.80, $0.08 ahead of consensus, and projected 2010 EPS growth of 7%–13% to $3.00–$3.15. Shares were unchanged. The following day, Life Technologies initiated the sales of $1.5 billion in senior notes to help repay term loans. The offering was completed on February 19. During this period shares rose 5.6%.

Robert W. Baird upgraded Sigma-Aldrich on February 11 to “Outperform” from “Neutral.” The following day, Jefferies initiated coverage of Pall with a “Buy” rating.

Diversified Instrumentation Stock Index

The Diversified Instrumentation Stock Index rose 3.5% to 81.70. All six companies grew, led by a 12% rise for Agilent Technologies. The Index has lost 0.5% this year. Half the companies traded higher and half lower. Roper Industries leads the Index, up 6%, while Mettler-Toledo (see page 12) is down 5%.

Roper Industries announced EPS of $0.81 on February 3, $0.11 above consensus, and projected first-quarter EPS of $0.62–$0.65, 4% above estimates. The company expects 2010 EPS of $2.83–$3.03. Shares improved 4.3%. The following day, Mettler-Toledo reported EPS of $2.09, $0.12 ahead of expectations, and projected first-quarter EPS growth of 3%–9% to $0.98–$1.04 and full-year EPS growth of 6%–10% to $5.90–$6.15. Shares grew 0.7% the following day. On February 12, Agilent reported fiscal first-quarter EPS ended January 31 of $0.38, $0.06 ahead of consensus, and projected second-quarter EPS of $0.38-$0.42, 14% above analysts’ estimates. The company announced full-year EPS estimates of $1.65-$1.70, and the sale of its network solutions business to JDS Uniphase. Shares rose 2.1%.

International

For the month and year, three Pacific Region companies improved, while two declined. Shimadzu recorded the largest gain for both the month and year, rising 19% and 48%, respectively, while JEOL declined the most for both the month and year, down 4% and 3%, respectively. On February 15, Horiba reported full-year EPS of ¥43.27 ($0.46), compared to ¥146.50 a share ($1.42), and projected 2010 net income growth of 1.2%. Shares declined 5.8% the following day.

In February, eight European companies recorded positive returns, three declined and three traded flat. Robotic Technology Systems improved the most, climbing 11%, while Cybio lost 18%. For the year, seven companies have gained ground, while five have negative returns and two are unchanged. Biohit leads all European companies, up 67%, while Exiqon is down 40%.

On February 10, Sartorius reported preliminary year-end revenue of €602.1 million ($836.3 million) compared with €611.6 million ($899.4 million) a year ago. The company projected 2010 growth of over 5% in constant currencies. Shares improved 1.0%. Biohit reported fourth-quarter EPS of €0.05 ($0.07) on February 11, compared to $€0.06 ($0.09) a year ago. Shares were relatively unchanged. On the same day, Biotage reported fourth-quarter EPS of SEK 0.41 ($0.06), compared to SEK 3.24 ($0.42). Shares fell 4.2% the following day. On February 12, Analytik Jena (see page 12) reported fiscal first-quarter EPS of €0.21 ($0.31) compared to €0.36 ($0.47). Shares grew 1.0%. On February 23, Spectris (see page 12) reported preliminary full-year EPS of £0.45 ($0.71), compared to £0.73 ($1.32) a year ago. Shares traded only marginally lower.

Chart: IBO Instrument Industry Stock Index

Lab Instrument Stock Index S&P 500

Feb-08 607.77 319.03

Mar-08 600.29 317.13

Apr-08 600.29 332.20

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