BOSTON ( TheStreet) -- Osteotech ( OSTE) was one of several stocks trading near $5 moving on above-average volume Tuesday after the bone graft company was acquired in a $123 million deal.

Osteotech shares rallied after medical device maker Medtronic ( MDT) said it would buy the company for $6.50 per share, a 65% premium to Osteotech's closing price on Monday.

Shares of Osteotech surged by $2.51, or 63.7%, to $6.45. Volume topped 4.38 million shares, compared to the average daily share volume of 43,000.

Elsewhere, PMI Group ( PMI) jumped by 41 cents, or 15.8%, to $3.01 after hedge fund firm Paulson & Co. disclosed in a regulatory filing that it held 5 million shares of the mortgage insurer at the end of the second quarter. Volume topped 10.51 million shares, compared to the average daily share volume of 6.74 million.

Joe's Jeans ( JOEZ) shares traded sharply higher in the absence of any company-specific news. Stock of the jean maker rose by 26 cents, or 14.2%, to $2.09. Volume topped 1.98 million shares, compared to the average daily share volume of 767,000.

On the downside, American Apparel ( APP) dropped by 31 cents, or 22.3%, to $1.08 after the clothing company raised doubts about its ability to continue as a "going concern." This comes as American Apparel said it would delay its second-quarter earnings report after its accounting firm resigned last month.

American Apparel also said it is working with its lenders to amend its credit agreement, as the company may not be able to repay a loan due in September. Volume topped 1.77 million shares, compared to the average daily share volume of 337,000.

-- Written by Robert Holmes in Boston.

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