Hot Stocks: Homebuilders rally; CMPI, ACC jump on merger deals; SAVA falls to new low
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After lackluster trading the previous day, stocks received significant buying interest on Tuesday, with the Nasdaq jumping 2.2% and the Dow adding almost 500 points. The gains reversed some of the losses posted over the past couple weeks.
Homebuilders contributed to Tuesday's rally, following the release of industry estimates issued by Freddie Mac. Lennar (LEN), D. R. Horton (DHI), KB Home (KBH), PulteGroup (PHM), Toll Brothers (TOL), Beazer Homes (BZH) and Trip Pointe Homes (TPH) all finished higher.
Elsewhere in the market, M&A news provided a major catalyst during the day. Checkmate Pharmaceuticals (NASDAQ:CMPI) quintupled in value after signing a deal to be acquired. At the same time, a separate purchase agreement sparked a double-digit percentage gain in American Campus Communities (NYSE:ACC).
On the other side of the spectrum, Cassava Sciences (SAVA) plummeted amid renewed concerns about its controversial Alzheimerâs drug, falling to a new 52-week low.
Sector In Focus
Signs of strong home buying demand sparked a rally in homebuilding stocks, with investors betting that the latest figures point to continued strength in the sector, despite the recent rise in mortgage rates.
Lennar (LEN) was among the leaders in the sector, climbing almost 5%. D. R. Horton (DHI), KB Home (KBH), PulteGroup (PHM), Toll Brothers (TOL), Beazer Homes (BZH) and Trip Pointe Homes (TPH) each rose about 4%.
The advance followed a report from Freddie Mac that home price growth will average 10.4% in 2022. Meanwhile home sales will reach 6.7M, down modestly from last year's 6.9M.
Standout Gainer
News of a takeover deal sparked a massive gain in Checkmate Pharmaceuticals (CMPI), which jumped more than 300% after Regeneron Pharmaceuticals (REGN) agreed to purchase the clinical-stage biotech in a transaction valued at about $250M.
The deal calls for a purchase price of $10.50 per share in cash. The transaction is slated to close in mid-2022.
CMPI skyrocketed $7.94 to close at $10.35. Shares also reached an intraday 52-week high of $10.45 during the session.
Notable New High
American Campus Communities (ACC) jumped almost 13% after Blackstone (BX) agreed to purchase the owner of student housing for $12.8B. The rally took the stock to a new 52-week high.
Under the agreement, BX will pay $65.47 per share for ACC. The transaction is slated to close in Q3.
ACC has been at the center of activist activity. Last week, activist investor Land & Buildings withdrew its nominee for the firm's board.
ACC spiked $7.22 on Tuesday to close at $64.80. Shares had reached as high as $65.02 -- a new intraday 52-week high.
Tuesday's advance added to an upswing that began in mid-February. Shares have climbed 22% over that period.
Notable New Low
Cassava Sciences (SAVA) dropped 11% after a story in The New York Times
leveled new allegations against its experimental Alzheimerâs therapy, known as simufilam.
The latest news about the controversial drug centered around the retraction of five papers by the scientific journal PLoS One. The papers were submitted by Dr. H.Y. Wang, an advisor to SAVA, with two co-authored by SAVA's chief scientist.
As the Times put it, the move followed "serious concerns about the integrity and reliability of the results."
Dragged down by the news, SAVA plunged to an intraday 52-week low of $18.65. Shares cut its losses through the session but still closed lower by $2.85, finishing at a level of $22.46.

For more information on the day's biggest movers, head over to Seeking Alpha's On The Move section.