U.S. stocks are trading mixed this afternoon, with the Dow struggling to build on solid gains from the last two sessions. Among the names in the spotlight today are tech stock Western Digital Corp (NASDAQ:WDC), retail giant Target Corporation (NYSE:TGT), and biopharmaceutical company Lexicon Pharmaceuticals, Inc. (NASDAQ:LXRX). Here's a quick look at what is moving shares of WDC, TGT, and LXRX.
Western Digital stock is down 5.1% to trade at $84.27, after Toshiba signed a memorandum to accelerate talks to sell its memory chip business to a group led by private equity firm Bain Capital, despite Western Digital's bidding efforts. Toshiba said it intends to sign a contract by the end of the month, but added that the memorandum does not exclude talks with other bidders, which also includes Taiwan's Foxconn. Western Digital said it's "disappointed Toshiba would take this action," but remains confident it can protect its interests. In light of the news, Summit Redstone downgraded WDC to "hold" from "buy," with the analyst calling the Western Digital-Toshiba relationship "extremely strained and likely irrepairable [sic]."
Despite the tech stock's longer-term uptrend -- it peaked at a two-year high of $95.77 on July 21 -- options traders have been bracing for WDC's retreat. Likewise, short interest on Western Digital stock grew by 40.6% during the past reporting period, to nearly 8 million shorted shares. The stock's200-day moving average, however, could contain the shares' pullback like it did in mid-August.
Shares of Target stock are on the rise today, last seen trading 2.7% higher at $59.44, after the retailer said it plans to hire 100,000 workers for the holiday season -- a 43% boost from last year. The announcement lifted the stock to an intraday high of $60.12 -- territory TGT shares haven't visited since their late-February bear gap. What's more, TGT is knocking on the door of its 200-day moving average for the first time since January, and is up roughly 22% from the five-year low of $48.56 it touched on June 16. A short squeeze could send the shares even higher, as short interest represents six days' worth of pent-up buying demand, at TGT's average daily trading volume.
Swimming in the red with WDC today is Lexicon Pharmaceuticals stock, last seen down 7.3% to trade at $13.66. LXRX shares hit a one-year low of $12.93 earlier, as an editorial in the New England Journal of Medicine called out "flaws in the design" of the short-term trial for Lexicon's diabetes drug. Today's plunge sends LXRX shares 1.4% below their year-to-date breakeven level, and ranks the stock among the worst on the Nasdaq.
Shorts are likely cheering today's decline, as short interest on LXRX accounts for38% of the stock's total float, or 31 times' LXRX's average daily trading volume. LXRX, however, is on the short-sale restricted (SSR) list today.