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Hot Stocks: Electric Vehicle Stocks Rally; VALN pounces on PFE investment; ACAD and ODP fall to 52-week lows

Bargain-hunting after last week’s sell-off sent major U.S. stock indexes higher on Tuesday. As worries about a possible recession persisted, the Nasdaq and S&P 500 both posted gains of around 2.5%.

The electric vehicle space has been one of the leaders on the rise. This battered sector received a wave of bearish buying, with names like Tesla (TSLA), Li Auto (LI), Rivian Automotive (RIVN), Lucid Group (LCID) and Nio (NIO) all showing strength .

Valneva (NASDAQ: VALN) represented another notable winner of the session. The French vaccine maker nearly doubled in value after receiving a major investment from Pfizer (PFE).

Looking at some of the most notable decliners of the day, Acadia (ACAD) lost almost a third of its value after hitting a potential stumbling block for an expanded label for one of its drugs. Office Depot owner The ODP Corporation (ODP) also lost ground after its board decided not to go ahead with a plan to break up the business.

Focus on the sector

Tuesday’s stock market rebound had an outsized impact on the electric vehicle sector. Investors picked names beaten in the space after the sharp pullback in the past two weeks.

Meanwhile, shares benefited from a short-term catalyst involving Li Auto (LI), which jumped nearly 8% after the announcement of a new SUV model. At the same time, the sector was boosted by Citi’s higher price targets.

As part of the rally, industry heavyweight Tesla (TSLA) made a notable advance. Shares of the electric vehicle maker led by Elon Musk climbed 9% to close at $711.11. Shares hit a 52-week low of $615.50 in late May.

Elsewhere in the sector, Rivian Automotive (RIVN) climbed 11%, while Lucid Group (LCID) rose nearly 8%. Nio (NIO) advanced around 9%.

Outstanding Winner

Valneva (VALN) jumped more than 90% after pharmaceutical powerhouse Pfizer (PFE) took a large stake in the French vaccine maker. The move marked an expansion of the companies’ collaboration on a Lyme disease vaccine.

Under the new deal, PFE will purchase an 8.1% stake in VALN, representing an investment of $95 million. This follows a collaboration agreement signed in 2020 for VLA15, which is expected to enter late stage trial later this year.

Buoyed by interest from PFE, VALN jumped $12.77 to close at $26.48. The rally reversed losses seen earlier in the month, with the stock hitting a 52-week low of $13.71 set last week.

Outstanding Loser

Acadie (ACAD) plunged following a regulatory setback, losing 33% on the day.

The drop came after a panel advising the U.S. Food and Drug Administration voted against expanding the label of the company’s antipsychotic treatment pimavanserin. The biotech had wanted to use the drug for the treatment of hallucinations and delusions associated with Alzheimer’s disease.

The drug is already FDA-approved for use in treating hallucinations and delusions associated with Parkinson’s disease psychosis.

ACAD ended Tuesday’s trading at $13.01, down $6.50 on the session. Shares also hit a 52-week intraday low of $12.24, undoing an attempted rebound the stock had seen the previous month.

New notable low

News that the company has decided to abandon a considered plan to divest its consumer business prompted the sale to The ODP Corporation (ODP). Shares of the owner of the Office Depot and OfficeMax brands of office supply retailers fell 14%, falling to a new 52-week low.

ODP revealed that its board of directors has unanimously decided to keep the consumer business for the time being. Meanwhile, the board also decided that the company would not pursue a previously announced separation, attributing the decision to market and macroeconomic conditions.

The office supply retailer has kept open the possibility of relaunching its disruptive plan in the future.

Hurt by the decision, ODP pulled back $4.75 to close at $30.25. During the session, shares hit a 52-week intraday low of $29.51.

The slide added to the stock’s recent weakness. The ODP has fallen 22% in the past month and lost nearly 36% of its value in the past year.

For more on the best and worst performing stocks of the day, head to the On The Move section of Seeking Alpha.

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