The Night Watch: Stocks Moving Up After Legal Issues Drop Them

FDA claims Guidant made misleading statements and Rambus lost a round in a patent case.

Author:: Dan Bernstein
Publish date:: May 4, 2001 5:52 PM EDT

FDA claims Guidant made misleading statements and Rambus lost a round in a patent case.

Two stocks that dropped during the regular trading day on legal issues struggled slightly higher on heavy volume trading tonight.

The

Food and Drug Administration

announced this afternoon that

Guidant Corp.

(GDT)

appears to have acted in violation of federal laws earlier this week by making improper claims about the safety and effectiveness of a new experimental product, the Contak CD pacemaker. The biotech company also may have made misleading claims suggesting that the device would win regulatory approval, according to the FDA. Guidant rose $1, or 3%, to $34 on very high volume trading, surging to well over one million shares traded in the first half-hour of the post-market session on

Instinet

. The stock had fallen over 12% in regular trading.

Guidant responded to the FDA announcement by claiming that its statements about the product were in compliance with FDA rules.

Morgan Stanley Dean Witter

cut Guidant's rating yesterday to neutral from outperform.

Other legal news drove

Rambus

(RMBS) - Get Report

to trade in high volume tonight, after an announcement earlier in the day that a U.S. district court had ruled against it in a patent-infringement suit it had filed against chipmaker

Infineon

(IFX)

. Rambus was halted awaiting the announcement, and after trading resumed the stock tanked by 19.6% over the course of the regular trading day. Infineon meanwhile gained 5.4%. Rambus fought for a comeback in the after-hours market, gaining a 6.2% to $15.50 on Instinet, and rose 5.1% on

Island

trading.

The rest of tonight's action remained quiet and mixed as traders headed home for the weekend.

Cisco

(CSCO) - Get Report

hung near the top of the high volume traders, picking up a six- cent gain to $19.70 on Instinet and an eight-cent gain on Island. After announcing a restructuring effort that includes cutting 210 jobs, telecommunications provider

CoreComm

(COMM) - Get Report

gained 5.6%, which translates to just one penny of its 22-cent price tag. The stock is down more than 99% from its 52-week high of $33.75.

Juniper Networks

(JNPR) - Get Report

gained 0.3% on Island to $61.29 on Island trading.

Ciena

(CIEN) - Get Report

rose by 27 cents to $54.51.

Level 3 Communications

(LVLT)

rose by 1.1% to $16.90 on Instinet, while

Sun Microsystems

(SUNW) - Get Report

and

3Com

(COMS)

remained unchanged after light trading.

A couple of penny stocks made big percentage moves tonight on Island trading.

Healthcentral.com

(HCEN)

fell by 5.6% to 17 cents, after gaining 33.3% during the regular day.

Neoforma.com

(NEOF)

climbed back up 15.7% to 96 cents after falling 34.5% during the regular market.

This information is provided by Instinet, a wholly owned subsidiary of Reuters (RTRSY) . For further information, please contact Instinet at www.instinet.com.

Island ECN offers trading, mainly in Nasdaq-listed stocks, from 7 a.m. to 8 p.m. EST.

Confused?

TheStreet.com

explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.