Morgan Stanley Pops: Big Financial Winner

Morgan Stanley (MS) ended up the big winner among U.S. financial names on Tuesday, with shares reversing earlier losses and ending the session up over 12%, to close at $14.1.

The broad indexes rebounded following comments from Federal Reserve Chairman Ben Bernanke to the Joint Economic Committee of the U.S. Congress, in which the Fed Chairman expressed confidence that "European leaders are strongly committed to addressing" the sovereign debt crisis within the Eurozone. Investors also cheered the news that executives of Deixa SA were discussing a possible "good bank/bad bank" breakup plan for the company, with French and Belgian officials.

The KBW Bank Index (I:BKX) climbed 4.5% to close at $35.17, with all 24 index components showing gains for the session, except for First Niagara Financial Group, which was down 3% to close at $8.66.

Shares of First Niagara have decline 41% since they closed at $12.25 on July 29, which was the last trading session before the Buffalo, N.Y. lender announced its $1 billion deal to acquire 195 branches from HSBC (HBC). The deal is expected to be completed early next year, with First Niagara issuing between $750 and $800 million in new common shares. Of course, as the shares decline, First Niagara's shareholders face a significant increase in the dilution of their stakes from the planned offering.

Shares of Fifth Third Bancorp (FITB) rose 9% to close at $10.64.

Zions Bancorporation (ZION) was up 8% to close at $14.74.

Large U.S. banks seeing shares rise 6% Tuesday included Bank of New York Mellon (BK), closing at $18.82; Citigroup (C), at $24.39; Commerce Bancshares (CBSH), at $35.79; Cullen/Frost Bankers (CFR), at $49.96; Comerica (CMA), at $23.51; JPMorgan Chase (JPM), at $30.26; Northern Trust (NTRS), at $36.02; Regions Financial (RF), at $3.19; and State Street (STT), which closed at $32.06.

Huntington Bancshares (HBAN) was up 5% to close at $4.91.

Shares of Bank of America (BAC) rose 4% to close at $5.76, after announcing plans to shutter its correspondent mortgage business, after failing to sell the unit.

Bank of America was among five holding companies for which Wells Fargo significantly cut earnings estimates on Tuesday.

Efficacy Study Results Bared By BioDelivery Sciences

The initial findings of BioDelivery Sciences International Incorporated (BDSI) in regard to their random, placebo-induced, Phase 3 clinical study of BEMA Buprenorphine, used for the treatment of moderate to severe chronic pain in mixed opioid na?ve and opioid treated population were revealed recently. The main thrust of the study which is to compare the overall pain intensity difference between BEMA Buprenorphine and placebo was not realized, but BDSI said that generally, the study results were inclined to support BEMA Buprenorphine to include the statistic-significant difference between BEMA Buprenorphine and placebo in the patients treated with opioid experience in the tests conducted (relatively equal to p=0.067).

There was also a statistically significant difference between BEMA Buprenorphine and placebo when there was segregation of patients not undergoing titrate from the starting dose (p=0.025). The company, armed with the findings from this study, is pondering on conducting another efficacy study that is estimated to take 9 months to complete.

According to Dr. Andrew Finn, Executive Vice President of Product Development, there has been a high placebo response in the opioid na?ve sector of the patient group, specifically with the starting dose, which was responsible for the lack of efficacy that was revealed in this study.

BioDelivery stock is still struggling badly, falling to as low as $1.24 during the last week. This is the all-time low for the company that has been around since summer 2002, the all-time high being $6.94, recorded in June 2009. Nevertheless, BDSI might be a stock to watch due to the current low price.